The future of M&A over the next two years looks very bleak. Two recent studies predict that M&A will stall, with government-backed deals becoming the one bright spot of slowing global transactions.
A joint study from Barclays Capital and Nomura Holdings Inc. says that deals could fall as much as 30% in 2009 to about $2 trillion, led by government acquisitions. An analysis by Bernstein Research projects that total M&A volume, including private equity and strategic deals, will fall by 25% in 2009 from the previous year, followed by a 15% year-over-year decline in 2010.
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Last week, two of the biggest domestic deals involved the U.S. government acquiring stakes in two struggling banks. The U.S. government acquired preferred shares in fledging South Financial Group Inc. for $347 million, which registered as the No. 4 domestic deal of the week. It stepped in again by buying a stake in Sandy Spring Bancorp Inc. for $83 million for the 10th-largest domestic deal of the week.
With the U.S. and global economy expected to worsen, more government-backed deals are expected. Overall, more than a third of the 20 biggest global acquisitions announced in the fourth-quarter were government-induced, according to Bloomberg. - Gerald Magpily
See Bloomberg article
See story about Bernstein report from DealBook
Comments
Can anyone tell me where I can find a copy of the reports mentioned in the article?
Regards,
Oliver