KPMG issues 2016 M&A predictions

KPMG has delivered its predictions and expectations for global M&A levels with the latest edition of the KPMG International Global M&A Predictor.

The big four firm has noted that the global appetite to do deals is predicted to rise by four per cent over the next 12 months, thanks largely in part to increased corporate confidence.

Capacity to fund M&A growth, meanwhile, is expected to rise by 13 per cent over the same period, as companies continue to pay down debt and bolster their cash reserves.

“We expect strong transactional activity in many western economies in 2016 with healthy balance sheets, profit levels and strong liquidity in the debt markets among the highlights,” said Leif Zierz, KPMG International global head of deal advisory.

KPMG noted that with the Chinese economy cooling down, the US starting to raise interest rates, and oil prices depressing the economies of oil exporting countries, uncertainty still remains.

“Increased sector convergence and ongoing digitisation make a compelling case for future strategic adjustments. However, emerging market economies are expected to remain challenging,” Mr Zierz added.

Europe is expected to be one of the strongest performers. The 10 percent increase predicted within the region is more than double the global average. In the Asia Pacific (other) and Asia Pacific (Japan) regions, the figures are a more modest six percent and four percent respectively.

 

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