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Report predicts 'robust growth' for technology M&A

7 May 2010

A new report has indicated that conditions continue to favour an upsurge in mergers and acquisitions (M&A) within the global technology sector, despite a recent drop in deal values.

The quarterly survey from Ernst & Young shows the volume of deals continued its upward trend in the first quarter of the year, as 628 deals were recorded in comparison with 553 in the final quarter of 2009.

However, the total disclosed value of deals fell by 66 per cent to $12.1 billion (£8.2 billion).

Ernst & Young's Joe Steger put this decline down to several factors, including large businesses pausing in the M&A market and the traditional seasonal dip in values between the fourth and first quarters.

He said the number of "small, strategic" acquisitions taking place suggests the outlook remains positive for technology M&A, with "robust growth" possible as the year progresses.

"Leading technology companies have significant cash reserves that provides the financial flexibility that readies them to do deals," Mr Steger concluded.

Analysts from UBS told Reuters last month that British firms are likely to emerge as the primary targets of M&A activity involving US companies this year.

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Categories: Technology, Entertainment & Communications


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