Australasian M&A activity down
(16 August 2010 − Australia) The merger and acquisition market has experienced a slow year, as activity within Australia and New Zealand more than halves and the number of deals drops to the lowest level in more than four years.
Thomson Reuters August investment banking scorecard has also revealed that the number of deals given the go-ahead by directors, but were later withdrawn, has doubled.
The scorecard also shows that deals that have been ditched have reached the highest level in a decade with US$40.5 billion (A$45.3 billion) being canned so far this year.
The domestic deals that were continued this year are worth US$30.8 billion, down 52 percent.
Anthony Sweetman, UBS's head of mergers and acquisitions, told The Australian newspaper that there was still a reasonable amount of activity in Australia's corporate landscape.
Mr Sweetman noted that the fall in deal values could be attributed to the fact previous transactions, valued when the market was more buoyant, would be priced differently in today’s market.
Generally, people are cautious when you look at the global macro-economic picture, but you are still seeing a relatively strong underlying level of activity, Mr Sweetman said.
However it's not 2006 and 2007 when the markets were buoyant and prices were very high and there was a lot of activity, the investment bank’s head added.
Overall merger and acquisition activity for New Zealand and Australia, including foreign deals has dropped from US$93.1 billion to US$71.3 billion year-on-year.
The scorecard also shows that deals that have been ditched have reached the highest level in a decade with US$40.5 billion (A$45.3 billion) being canned so far this year.
The domestic deals that were continued this year are worth US$30.8 billion, down 52 percent.
Anthony Sweetman, UBS's head of mergers and acquisitions, told The Australian newspaper that there was still a reasonable amount of activity in Australia's corporate landscape.
Mr Sweetman noted that the fall in deal values could be attributed to the fact previous transactions, valued when the market was more buoyant, would be priced differently in today’s market.
Generally, people are cautious when you look at the global macro-economic picture, but you are still seeing a relatively strong underlying level of activity, Mr Sweetman said.
However it's not 2006 and 2007 when the markets were buoyant and prices were very high and there was a lot of activity, the investment bank’s head added.
Overall merger and acquisition activity for New Zealand and Australia, including foreign deals has dropped from US$93.1 billion to US$71.3 billion year-on-year.
Subscribe