A
RUNAWAY merger train is roaring along in its third year with last year's
M&A volume breaking the US$4.1 trillion annual record set in 2007,
Reuters
reports.
To
understand why this could stay on track for a while longer, look at North
America's railway mega-deal.
Canadian
Pacific
in mid-November disclosed a $28 billion offer to buy Norfolk Southern. The
Calgary-based railway is grappling with slow growth.
Its
revenue is projected to increase by just 2.4 per cent in 2015 compared to
almost eight per cent for each of the last two years. It's not alone: S&P
500 Index constituents suffered a collective third-quarter sales drop of 3.9
per cent, according to FactSet.
The
shareholder roster at CP offers more insight. Its biggest investor was hedge
fund billionaire Bill Ackman's Pershing Square. Activist investors like Mr
Ackman have doubled their funds to some $130 billion in two years and piled
into nearly every industry.
Cross-border
merger transactions tend to increase. About 44 per cent of deal volume in 2007
included a buyer and seller from different countries, according to Thomson
Reuters data. In 2015, it was about a third, suggesting there may be capacity
for more, said Reuters.
Similarly,
Canadian Pacific's offer was unsolicited. Such aggressive approaches, including
ones, eventually withdrawn, accounted for 15 per cent of M&As in 2007
compared with about 14 per cent in 2015. Lofty valuations could make targets
more demanding and eager suitors increasingly frustrated.
Source
: HKSG.
Tidak ada komentar:
Posting Komentar