By Braun Jones, Partner, WWC Capital Group, LLC
After some promising tailwinds formed in the beginning of 2010, the forecast for mergers and acquisitions in has suddenly turned a bit cloudy. Global M&A deal volume actually pulled back slightly in Q2 after a decent uptick in Q1.
News last week from Bloomberg stated, “mergers and acquisitions may fail to emerge in 2010 after dealmaking fizzled in the first half …” According to data complied by Bloomberg, there was a 2% decline in global acquisitions in the first half of 2010 ($872.9 billion compared to $891.7 billion in the first half of 2009). In fact, June was the worst month for deals since July 2009. All this after a welcome 5% increase in deal volume for the first quarter.
This news comes after many dealmakers were expecting more from 2010. In fact, in May we posted an article on Corporate Growth…Capital Style announcing the results of a survey conducted by Thomson Reuters and the Association for Corporate Growth, which determined 85% of dealmakers expect an increase in M&A activity.
What we are experiencing is a very cautious dealmaking community. Buyers will continue to wait and hold onto cash until the market is more stable.
So, what does this mean for the remainder of 2010 and 2011? I think most people in the dealmaking community would agree that deals will remain steady for the rest of 2010. Please drop us a comment and let us know your thoughts on M&A activity for 2011.