KPMG: Global M & A Activity Returns To The End Of The Year

Global M & A pactions in 2009 will continue to shrink and fall to the bottom in the second and third quarters. But as liquidity improves, the M & A activity is expected to pick up at the end of the year, and the valuation of some industries is also considered attractive. It is expected that the global market will get out of the low tide of mergers and acquisitions before the end of 2010, and KPMG's global merger and acquisition forecast released yesterday.

The forecast for the first time pointed out that the valuation of all regions has declined sharply in the past 12 months, leading to a sharp decline in mergers and acquisitions. The largest decline is in Africa and the Middle East, followed by Latin America, followed by North America. In addition, Europe has become the second smallest region in the world, which is only inferior to Asia.

The report also showed that the forecast price earnings ratio of all industries showed a downward trend, with the most significant decline in technology, basic materials and industry, while oil and natural gas, telecommunications, consumer services and health care industries also plummeted, while the consumer goods industry was the most vulnerable.

The industries and regions with the biggest decline in forecast P / E are industry in Africa and the Middle East, basic materials in Latin America and health care in Latin America. The most serious industries with deteriorating balance sheets are Latin American technology, consumer goods in Europe, oil and gas in the Asia Pacific region, and oil and gas in North America.

Zhou Yibang, partner of KPMG's Chinese enterprise financing service, said: "the prospect of M & A in 2009 will be very bleak.

We expect that the volume of global M & A pactions will continue to shrink to the third quarter, and because the liquidity of the market is decreasing and the capital turnover rate of the bond market is slowing down, the acquisition intention and acquisition capability will continue to decline. "

Zhou Yibang also pointed out that attention should be paid to those market participants who can cash pactions, such as the reserve for accidental loss of cash, some sovereign wealth funds and private family businesses.

"I think in the next 12 months, we will begin to see some obvious signs that can reflect a slow but powerful recovery in the M & a market.

When the market appears to be reasonable and not sold at a super low price, it can clearly show that the recovery time has arrived.

He also expects some cross-border mergers and acquisitions in the Asia Pacific region during the year because capital adequacy companies will take strategic acquisitions in the current environment.