2012 isn’t off to such a hot start for M&A, but dealmaking pros still are looking on the bright side of life.
The Brunswick Group’s 5th Annual M&A Survey has dealmakers admitting they expect to see some form of a carried interest taxation increase levied upon the PE industry (by a 3:1 count!). However, even more—82 percent—said it wouldn’t hold up deal flow.
Perhaps it is strategics’ swelling balance sheets, but 63% of respondents told Brunswick’s survey team they expect to see even more all-cash transactions and an uptick in hostile bids (time to sharpen up poison pill clauses…). Still, the leading factor for the deal market—deal pros agreed—will be the global economy, which still remains on uncertain footing. More than 100 deal advisors responded for the 2012 poll.
Not all of them were so bullish—42 percent said they believed deal flow would only match 2011’s levels. But, cross-border activity is set to pick up, they agreed.
While the US economy could be salvageable, it isn’t necessarily the US that will be doing the salvaging, investing veterans said. Survey respondents said it is easier for Chinese firms to do deals in the US than it is for American buyers to transact in China, and that Chinese buyers will increasingly make plays in Europe. Consumer and energy industry deals are expected to see greater consolidation in China.
Domestic transactions are also set to rise in China, survey respondents agreed.