M&A Activity Boosts Year-End Economy
“Wait and see has been the dominant attitude of corporations’ approach to acquisitions because of the macroeconomic uncertainty due to the U.S. fiscal cliff and the euro debt crisis,” said Gene Sykes, global head of M&A at Goldman Sachs, to Bloomberg. Goldman Sachs oversaw $542 billion in deals around the world, leading the pack for the second year in a row. “Once these crises find a solution there will likely be a rebound in activity driven by continuing consolidation in natural resources, industrials, technology and financial services.”
That consolidation was evidenced by Deutsche Telekom AG’s $29 billion fourth-quarter merger with MetroPCS Communications (NYSE:PCS), and Softbank’s $20 billion purchase of 70 percent of Sprint Nextel (NYSE:S). About $86 billion in telecommunications deals were announced during the quarter.
The fourth-quarter also saw the largest deal of the year, which was Glencore International’s $34 billion purchase of Xstrata, a move that created the fourth-largest mining company in the world. Also notable was the proposed $8.2 billion takeover of NYSE Euronext (NYSE:NYX) by IntercontinentalExchange (NYSE:ICE).
Bloomberg also reports that European companies announced a 73 percent quarter-to-quarter jump in deal activity. Slow but substantial progress toward a solution to Greece’s debt crisis and regional economic weakness has helped create confidence in an economic rebound.