What do the merger and acquisition trends look like?

On Behalf of Dunlap Fiore, LLC |

Business executives have to make major decisions in their role within the company. A merger or acquisition is one of these decisions that business execs need to fully understand, weight the costs and benefits of this process. While M&A deals provide great and profitable opportunities for companies in Louisiana and other states in the nation, it is important to consider what the market looks like and when is a good time to sign an agreement.

What do the merger and acquisition trends look like in the next year? According to the Global Capital Confidence Barometer survey that was recently released, more than three-quarters of senior-level executives that were surveyed claimed they planned on actively pursuing an M&A deal over the next year.

Roughly 83 percent of those surveyed expected the merger and acquisition market would improve over the next 12 months while just 15 percent believed that it would remain stable. Moreover, out of those surveyed, 88 percent of executives claimed that they had at least two or three deals in the pipeline and more than half stated that they had three or more deals in the pipeline.

According to this survey, the top industries expected to engage in M&A deals over the next 12 months include consumer products and retail, automotive and transportation, life sciences and real estate. A major reason cited for these deals is to create a buffer against potential economic downturns that could occur.

While there are many positive prospects for M&A deals in the next 12 months, there are some concerns that have been prolonging or stopping these deals. The survey found that roughly 86 percent of execs found security concerns to be the highest concern in the entire deal making process. Specifically, cyber security is viewed as a major risk and 96 percent of those surveyed claimed they have canceled deals due to cyber security concerns or issues.

The above information highlights just some of the trends often associated with mergers and acquisitions. Companies need to consider numerous factors when entering a complex deal, therefore, it is important to be fully informed of the process and how to address any concerns or issues that might occur in the deal making process.

Source: Business Insider, “Business leaders say mergers and acquisitions will pick up in the next year,” James Kosur, accessed on Dec. 14, 2015