Increased merger activity will carry over to next year - report

By Rizza Sta. Ana

Dec 28, 2013 09:37 AM EST

Investors' Business Daily quoted mergers and acquisitions (M&A) experts believed the increased activity in takeovers that has picked up in the last six months of this year could be carried over into the next year.

PricewaterhouseCoopers (PwC), which analyzed data collated by Thomson Reuters, said average monthly deal volume increased from 808 deals monthly in the first siz months of the year to 886 deals monthly from July through November. It was observed that M&A deals continued even at the close of 2013, with the acquisition of Italy's Gentium by Jazz Pharmaceuticals of Ireland for $1 billion and Oracle reaching a $1.5 billion deal to acquire Responsys, a cloud-based marketing software maker.

On the other hand, takeovers in the US were observed to be more brisk than usual. M&A deals focused in the US declared so far this year were worth a collective over $1 trillion, which is an 11.5% increase in the total amount of M&A deals last year, Thomson Reuters said. Moreover, the figure is a 43.4% increase in M&A deals all over the world, which is the highest share in twelve years while the economy in the US does well relatively while stock rallies.

M&A deals globally were disappointing, said the Investors' Business Daily report. Global M&A decreased 5.7% to $2.37 trillion as compared to the figure last year, Thomson Reuters stated. M&A activity outside the US also dropped to the lowest figure since 2005 to $1.34 trillion, which is a 15.6% decrease.

Research firm Dealogic said Europe deals composed 27.3% of total activity in the world overall this year while Asia Pacific deals composed 22%.

Accounting firm KPMG, based on its survey with a thousand M&A professionals, said the consensus believed that US will record the highest M&A activity level next year. Many, however believed that China will also be a close contender, and expected Europe to follow suit.

Ernst & Young senior executive of transaction advisory services Rich Jeanneret said, "It's still a relatively fragile M&A market. If this confluence continues, we're optimistic we could see a modest recovery next year."

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