A survey of executives at European public companies produced some pretty surprising results about M&A strategies in 2008 and the prospects for dealmaking in '09. The Boston Consulting Group and UBS Investment Bank
polled 160 chief executives and senior managers and found that despite the global financial crisis, nearly a third expect to make significant deals next year. Here are some highlights:
- 29% of respondents expect to make a sizable acquisition in the next 12 months
- 21% expect to undertake a large transaction
- 53% expect corporate restructuring to trigger divestitures or the closure of business units
- 51% have stuck to their M&A strategies in 2008
- 22% increased deal activity in 2008
Much of the dealmaking will be fueled by strategics with strong balance sheets that can pursue bargain-priced targets. Still, even those well-positioned corporates may be hampered by the global economic crisis. More than half the executives surveyed said that internal and external pressures to focus on profitability over growth, and a lack of financing will limit their ability to pursue attractive targets.
- Suzanne Stevens
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Juergen Lasowski
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I am surprised by the results of this survey, especially when it comes to doing large acquisitions in 2009 with the obvious constraints on the market that are not predicted to go away any time soon.
The fact that the majority believe that a lack of financing will hamper their efforts, yet 29% hope to do big deals, leads me to believe a lot of all stock or low cash deals will be proposed during the first quarter of 2009