M&As to surge: AllianceBernstein
There could be surge in global mergers and acquisitions (M&A) on the back of cheap finance and low growth, according to investment management company, AllianceBerstein (AB).
AB's chief investment officer (CIO) of concentrated global growth, Mark Phelps, said while the annual scale of M&A had been low over the past two years, CIOs across the globe were considering deals to boost their companies' earnings.
Phelps said CIOs had noticed they could access cheap finance, buy discounted UK companies and that there had been an increase in Chinese buyers.
"Moderate economic growth globally and sluggish earnings growth in many regions, could provide an impetus for acquisitions," he said.
As the yen had risen by about 17 per cent against the US dollar, and about 14 per cent against the euro, target companies were relatively cheap for Japanese buyers, he said.
Chinese buyers were also everywhere and looked to expand abroad, Phelps said.
"Prominent [current] deals include China National Chemical's US$43 billion pending acquisition of Syngenta in Switzerland, and Dalian Wanda Group's proposed £921 million bid for Odeon and UCI Cinemas in the UK," Phelps said.
However for investors, prior to making an investment commitment they needed to understand how the M&A would work and how it would grow the business, he said.
Recommended for you
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
