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'Encouraging signs' for M&A activity revealed
A new report has indicated that the appetite for mergers and acquisitions (M&A) increased in the final quarter of 2009, despite an overall slump in activity.
Thomson Reuters revealed that the combined value of global M&A deals stood at $1.97 trillion (£1.23 trillion) last year, down 32 per cent from a total of $2.89 trillion in 2008.
However, the study also highlighted a 32 per cent rise in M&A activity during the fourth quarter, suggesting that a climate for deal-making is returning as the economic recovery progresses.
"The future looks encouraging for M&A, with strong indicators in the last quarter," commented Neil Masterson, global managing director of investment banking at Thomson Reuters.
Mr Masterson pointed out that the final three months of 2009 represented the biggest period of private equity-backed M&A activity for the last eighteen months.
A recent article in MoneyWeek claimed that many of the key market fundamentals required for an M&A upturn are now in place, with banks willing to lend money again and many organisations holding a large amount of cash on their balance sheets.