Mega-mergers may make a comeback this year as large companies look to expand into new business areas with brave acquisitions and the economic outlook in many countries improves.
Consultancy Towers Watson says the strong performance of last year’s acquirers and a significantly improved economic outlook is likely to tempt more companies into mega-mergers and making brave acquisitions.
According to the Quarterly deal performance monitor, produced in partnership with Cass Business School, acquirers recorded their best performance in six years last year.
The share prices of those acquiring outperformed those of their non-acquiring peers by an average of 4.5 percentage points.
The total number of deals, however, was lower than in previous years. Large, transformational deals worth more than $10 billion (€7.4 billion) were also rare.
Towers Watson also predicts that Europe, most notably the UK, is likely to experience a “small recovery” in completed deals although this is unlikely to match the activity in the Asia Pacific region and North America.
North America is forecast to increase its domination while outbound Chinese deals are forecast to rise.
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