Monday, October 18, 2010
The recent upswing in merger activity has led some to believe that maybe we are seeing a light at the end of the tunnel and that perhaps M&A might lead us out. Reporting the results of an Ernst & Young survey the FT.com is trying to put a squash on that:
Some of the world’s top business leaders are reversing plans for mergers and acquisitions due to a sharp deterioration in confidence over the past month amid fears of the uncertain macroeconomic outlook.
Austerity measures, increasing taxes, currency conflicts and regulatory concerns, among other issues, are undermining confidence in the global economy and reducing appetite for M&A, in spite of improved funding availability.
There has been a big turnaround in confidence from April when there were still hopes that the summer would represent the turnaround. According to the April 2010 study 47% of respondents anticipated doing an acquisition in the next six months. Now? That number has dropped to less than 25%.