DealZone

M&A uptick expected – survey

April 14, 2010

A survey of top dealmakers found that merger activity will increase during the balance of 2010, a sharp contrast in sentiment from last year.

A survey conducted by Brunswick Group LLC found that 78 percent of respondents expect M&A activity will continue to rise, while 22 percent said it would stay at the same pace seen in the first quarter.

Mergers and acquisitions topped more than $520 billion in the first quarter, up 19 percent from the first quarter of 2009, according to Thomson Reuters. Emerging markets and energy-focused takeovers made up a growing slice of the activity in the first quarter. Still, merger volume dropped 16 percent from the fourth quarter of 2009.

No advisors predicted a drop in deal activity for the remainder of 2010, according to the Brunswick survey. That’s in contrast to the 69 percent of respondents last year who said it would would take up to five years to return to the level of M&A activity seen in 2007.

The third annual survey polled 48 market participants in the M&A community, including bankers, lawyers and other advisors. Results were released on the eve of the 22nd Annual Tulane University Law School Corporate Law Institute, a top M&A conference.

Rising boardroom and CEO confidence in deal market conditions was the most significant factor driving the renewed activity, above the greater availability of credit and the low interest rate environment or an improving equity market and buoyant stock prices.

Among the top sectors seen as ripe for consolidation in 2010 are healthcare, energy, financial services, and technology and telecommunications, according to the survey.

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