Bob Filek, a partner in the Transaction Services group which compiled the report, said, “Those waiting for a ‘V’-shaped recovery in M&A activity in the second half of this year may be disappointed. The mega-deal drove the pace and intensity of M&A for the last five years. However, the fundamentals just aren’t there to continue that momentum.”
There is some hope on the horizon, however, Filek adds: “Look for merger and acquisition activity to spring back to life in 2002, lead by cross-border M&A activity. While Europe will dominate, watch for strong growth in U.S. companies entering and expanding into South America and Asia. But it will take as much as 18 months for buyers and banks to regain their enthusiasm for the game. That said, the economy is adapting faster than it did a decade ago. If excess inventories can be digested in 3 to five weeks time, compared with 12 to 15 weeks ten years ago, deal makers may spring back faster than we expect once the current cloud of economic uncertainty begins lifting, and bottom feeders hasten to purchase distressed assets at attractive multiples.”
