The term M&A (short for Merger & Acquisition) is a corporate strategy which envisages management of processes related to selling, buying and combining one or more businesses for a common cause. The common causes could be to aid, finance or assist a business to grow faster or perhaps even for a non-performing business to exit. Regardless of good times or bad times, the demands from stakeholders on businesses are always in one direction – increasing growth. In an economic downturn with declining demands and a competitive landscape, it is becoming increasingly challenging to maintain a consistent growth rate which are expected from businesses. Although not all businesses heading into M&A are in search of an answer to their stakeholders in lieu of organic growth, there are a number which are turning to M&A to grow their market share, revenue, economies of scale, expand their market or customer base or to eliminate the competition.
In H1 of 2009, the European M&A market had 1,530 deals (worth Euro 130 billion), and in North America, M&A activities have picked up in the Pharmaceuticals, Medical & Biotech sector where it has hit the US$174 billion mark (accounting for 42% of overall value of deals in North America). From January to July 2009, Greater China accounted for 42.6% of the total M&A deal in Asia Pacific region, and 34.7% in deal volume, which is a significant increase from the same period in 2008. Asia, ex Japan, recorded at least 250 deals in H1 2009, worth more than US$173 billion. (source: mergermarket) (more…)
