Cor­po­rate deal-mak­ing driven by fast tech­no­log­i­cal change

Kuwait Times - - Business -

LON­DON: The ap­petite for merg­ers and ac­qui­si­tions re­mains near a record high as firms try to adapt to fast tech­no­log­i­cal changes and de­spite a wel­ter of geopo­lit­i­cal con­cerns, a sur­vey of ex­ec­u­tives found yes­ter­day. In its half-yearly re­port of merg­ers and ac­qui­si­tions, or M&A, con­sult­ing firm EY found that 56 per­cent of firms are plan­ning a deal within the next 12 months. That’s un­changed from the pre­vi­ous sur­vey in April but way above the sur­vey’s long-run av­er­age. The sur­vey shows that the high de­gree of po­ten­tial M&A ac­tiv­ity runs par­al­lel to ris­ing ex­pec­ta­tions over the state of the world econ­omy, with all major economies grow­ing in sync. A stag­ger­ing 99 per­cent of global ex­ec­u­tives be­lieve the M&A mar­ket will im­prove or re­main sta­ble this year.

Since a lull fol­low­ing the global fi­nan­cial cri­sis, when firms opted for a safety-first ap­proach, M&A has be­come in­creas­ingly pop­u­lar, with many com­pa­nies opt­ing to use their cash re­serves to make deals, par­tic­u­larly in the field of fi­nan­cial tech­nol­ogy. Among the big deals an­nounced this year are John­son & John­son’s $30 bil­lion takeover of Swiss phar­ma­ceu­ti­cal firm Acte­lion and United Tech­nolo­gies’ plan to buy Rock­well Collins for about $23 bil­lion.

Other high-pro­file deals in­clude Ama­zon’s $14 bil­lion takeover of Whole Foods and Gilead’s $12 bil­lion ac­qui­si­tion of Kite Pharma. —AP

PHILADEL­PHIA: This March 25, 2014 file photo shows a CVS store and phar­macy in Philadel­phia. Ac­cord­ing to a re­port, the drug­store chain is in talks to buy Aetna, the na­tion’s third-largest in­surer. —AP

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