While the global economy continues to struggle, there were signs in Q3 2009 that the environment for mergers and acquisitions has taken a positive turn, according to a new report by Pricewaterhouse Coopers.
Assembling value: Third-quarter 2009 global industrial manufacturing mergers and acquisitions analysis, finds that deal value experienced a 272% increase in Q3 2009 from the prior quarter. Deal activity in the third quarter showed a marked improvement, both in terms of deal volume and value, increasing from 10 deals with a disclosed value of $1.8bn in the second quarter to 29 deals with a disclosed value of $6.7 billion in the third quarter.
Year-to-date deal activity remained constrained relative to 2008, possibly due to the lull in activity by financial investors and persistent — although improving — weakness in the capital markets.
Jason Wakelam, manufacturing expert, PricewaterhouseCoopers, says: “Particularly when looking at the pattern for industrial manufacturing M&A activity coming out of the past three recessions, which indicates that the deal environment improves as the overall economy comes out of a downturn, Q3 does show signs that things may have turned a corner.
“Certainly the past is not always an accurate indicator of future performance, but trends coming out of past recessions, coupled with the sequential improvements in Q3, provide some comfort heading into 2010.”
Targets located in the Asia & Oceania region remained the focus of deals through the first three quarters of 2009, with 44% (as measured by deal volume) of all targets located in this region, compared to only 28% in 2008.
Acquirers from Asia & Oceania, North America, and the UK & Eurozone regions drove deal activity in both volume and value through the first nine months of 2009, accounting for 88% of deal volume and 84% of deal value year-to-date.
Click here to download the report.