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According to Yonhap News,
(SEOUL=Yonhap News)Fidelity Asset Management (Fidelity) announced on May 13 that the global mergers and acquisitions (M&A) market this year is expected to reach USD 3.7 trillion (KRW 3,781 trillion), which could be the highest since 2007.
According to Fidelity, the global M&A market peaked in 2007, at USD 4.9 trillion, and decreased to USD 1.9 trillion in 2009.
It stayed at the USD 2 trillion level in the 2010s and reached USD 1.2 trillion in the first quarter of 2014.
If the trend continues, the global M&A market could reach USD 3.7 trillion this year.
According to Fidelity analysis, the causes for this include the fact that global liquidity conditions are favorable despite reduced quantitative easing by the United States and that the corporations of several countries have strengthened their financial structure.
Furthermore, multinational corporations hoard large quantities of cash. As companies do not need to pay taxes so long as they do not remit their overseas profits to their homelands, American companies are increasingly engaging in M&A by reducing tax payments.
“A booming M&A market is a favorable factor,” said Paras Anand, head of Pan-European equities at Fidelity Worldwide Investment. “Interest in large-capital stocks will increase as their profits are now close to those of small-capital stocks.”
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Source: Yonhap News (May 13, 2014)
** This article was translated from the Korean.