This is why investors should hope for an uplift in M&A activity this year
Investors will be hoping for an uplift in mergers and acquisitions (M&A) activity this year, with a study highlighting the value added to companies by deals.
In 2016, buyers outperformed the average company by 5.4 per cent, according to a Willis Towers Watson (WTW) and Cass Business School study.
The outperformance was even more pronounced – 10.1 per cent – in 2015, a record year for M&A activity. So investors will be hoping to a return to these heights.
Read more: How boutiques have snatched bankers and M&A business from the heavyweights
Insurance company WTW has also shared its M&A predictions for 2017. Jana Mercereau, head of corporate M&A in the UK, is expecting:
Lots of local deals: due to global political uncertainty. US companies, in particular, are expected to invest at home following Donald Trump’s presidential victory.
Bigger, but fewer, mega-deals:
The business press has long focussed on ‘mega deals” over $10bn; 2017 may be the year when a $10bn deal is no longer noteworthy and we see a new class of “colossus” deals worth over $100bn.
Read more: After subdued 2016, these bankers are calling a 2017 bounceback for UK M&A
Extracting more value from M&A: “Due to increased scrutiny from shareholders, business leaders will invest more effort in creating greater value from past deal activity.”
Social responsibility:
Following populist political movements and the growing social unrest developing in countries; companies expanding overseas in 2017 will be held more accountable for their promised contribution to local economies, including job creation, fair employment and human rights.