Recovery to boost M&A activity in 2011

Economic recovery, particularly in Europe, is expected to drive merger and acquisition deals in 2011, a new survey finds

Europe, North America and Asia Pacific expect to see an uptick in M&A activity over the next 12 months, boosted by economic recovery, a survey of corporate executives, private equity practitioners, legal advisers and financial advisers across the regions has found.

A “significant” increase in deal flow is expected in Europe, say 37% of the 125 respondents to the mergermarket and Merrill Data Site survey.

Distress is likely to drive that increase, 78% say, particularly in the construction and financial services sectors where further consolidation is expected to take place in the next six to 12 months.

Increased backing from private equity is also expected to support further M&A.

For Europe, the outlook is bullish, with 16% of respondents predicting it will be a catalyst to more M&A.

A quarter of respondents in North America, and a fifth of those in Asia meanwhile think it will be an important deal driver.

Corporate buyers will play a key role in financing transactions, 56% say.

Activity could be short-lived, however. A majority of respondents (68%) also predicted a double-dip recession, causing any surge in M&A to fall through.

They also warned of ongoing difficulties in accessing finance for certain borrowers.

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