Salient to Investors:
Global M & A in Q4 rose to the highest level since Q3 2008. Gene Sykes at Goldman Sachs said the pickup may extend into 2013 once the fiscal cliff and euro crises find a solution, with driven by continuing consolidation in natural resources, industrials, technology and financial services.
Corporations sit on more than $3.5 trillion in cash.
Economists expect the US economy to expand 2 percent in 2013 and 2.8 percent in 2014. Christopher Lawrence at Rothschild’s said despite concerns about anemic growth, the US looks good on a relative basis.
Giuseppe Monarchi at Credit Suisse said people are more confident that the euro zone won’t collapse, so we could see a pickup later in 2013 but need more visibility on the macro side to feed CEO confidence.
Henrik Aslaksen at Deutsche Bank said European companies have strong balance sheets and low economic growth in their markets, so they have to acquire to grow.
Hernan Cristerna at JPMorgan is seeing much more interest in deal making. Scott Matlock at Morgan Stanley cites the backlog of assets that buyout firms want to either spin-off or find new owners for – many assets bought around 2006 and 2007 are particularly ripe for new ownership. Matlock said companies have strong balance sheets and access to attractively priced funding.
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