The excitement surrounding the recent announcement of several multibillion dollar transactions involving U.S. companies has sparked talk of a renewed wave of M&A. Midway through the first-quarter of 2013 worldwide M&A volume has approached c.US$302 billion .However, only two regions, the U.S and Asia/Pacific, are experiencing year on year increases, leaving other regions waiting for their turn in the sun.
A number of key drivers point to enhanced prospects for international M&A. Whilst some of the exuberance seen in the US, especially in private equity backed deals, may be spreading across the Atlantic, the mixed set of results that we have seen from some of Europe’s leading companies during the recent reporting season may not bode well in giving confidence to execute M&A transactions.
With significant capital to deploy, we can expect private equity firms to show strong interest as companies continue to spin-off non-core assets. At the same time, private equity firms are under pressure to dispose of portfolio companies as they seek to realise their investment and raise new funds. The considerable fire-power of private equity may jump-start more M&A activity, possibly prompting companies to get off the sidelines and compete for assets.
With abundant liquidity in both the loan and bond markets and favourable valuations in many sectors, the missing link is confidence, which is the life blood of M&A. The extent to which continued Eurozone and global uncertainty can be considered to constitute a “new normal” and perhaps tempt companies with so-called “pent up demand” for deal-making to engage in big strategic acquisitions in 2013, from which they have understandably shied away in 2012 in favour of bolt-on acquisitions , remains to be seen. The conclusive resolution of the US fiscal cliff, slower growth in Asia and emerging markets and muted Eurozone recovery are all obstacles to M&A activity. Caution is the watchword for most of the world’s leading markets at the moment.
Looking ahead, the Eurozone crisis and growth in emerging economies are likely to have a significant impact on global M&A activity as opportunists seek to buy up under-priced assets in periphery Eurozone countries and acquirers look to strengthen their business in Asia Pacific and Latin America in order to benefit from growth prospects in these regions. At the same time we can expect a growth in intra-regional deal activity in the Asia Pacific region. Potential acquirers are at the same time all too aware of the potential for the Eurozone crisis to impact on a global basis and to threaten growth in emerging economies.
This conference covers many of the key issues involved in public and private company M&A. It will provide an analysis of recent deals, the outlook for 2013, examining the sectors that are likely to provide scope for M&A and the prospects for emerging markets and EMEA activity. Latest developments in public company transactions will also be addressed including the implications of regulatory changes, especially those to the Takeover Code, which took effect in the autumn of 2011 and the resulting challenges facing bidders.
With hurdles for doing deals likely to remain high, the conference will also consider the role of M&A advisers and how they can add value effectively and adapt to an ever changing market landscape.
I look forward to welcoming you to the conference.
Loan Syndication and Placements
Sumitomo Mitsui Banking Corporation Europe Limited