M&A Lags in First Three Quarters

Although some believe the global economy is heading toward a recovery, mergers-and-acquisitions activity remains low, according to a recent study by Mergermarket.
In its preliminary third-quarter report, released Wednesday, Mergermarket noted that the number of announced deals in the first three quarters of 2009 ranks the lowest, at just 1,759, since the same period in 2003. The value of transactions completed to date — $978.9 billion for 5,914 deals — is 48 percent below the volume in the first three quarters of 2008.
According to the report, “The passing of the financial crisis appears to have made little impact on the established M&A league tables, at least for now.”
Mergermarket points to the U.S. as having the highest near-term potential for increased M&A, although the U.S. mergers market has declined by 41 percent in volume year-to-date in 2009, and 34 percent in value.
M&A in the Asia-Pacific region dropped 25 percent in both volume and value in the first three quarters of 2009.
The European M&A market, meanwhile, declined 70 percent in value and 48 percent in volume in the first three quarters. However, Mergermarket pointed out that the Russian consumer retail sector is one area of interest for private-equity firms, because profitable Russian retailers are in need of capital.