M&A market may cool down with capital supply getting squeezed
Mergers & Acquisitions market might cool down with supply of capital drying up in the context of increasing credit defaults, says the Boston Consulting Group.
By PTI |
MUMBAI: Mergers and Acquisitions (M&A) market might cool down with supply of capital drying up in the context of increasing credit defaults and private equity (PE) activity about to peak, the Boston Consulting Group said.
"One of the factor not in favour of increased M&A in the light of the unfolding subprime crisis was that an increase in corporate defaults could reduce the amount of capital available to prospective acquirers," BCG's global study on M&A said.
In India, however, M&A market is hotting up with local companies aspiring to become global, capital becoming much more easily accessible and the regulators adopting a positive stance, BCG India's Director P Harshavardhan said here today.
The pace of M&A activity could also slow down as one of the main drivers - the upswing in the Private Equity (PE) activity currently in ninth year was about to peak, BCG said.
However, PE firm's reserves, which were currently at around USD 250 billion, suggest they have more than enough fuel to sustain their growing involvement in M&A. Last year, the PE firms pumped in USD 660 billion in M&A globally.
However, historically the stock market which also peaked in a 10-year cycle had still few years to go since the bull run began in 2003.
"One of the factor not in favour of increased M&A in the light of the unfolding subprime crisis was that an increase in corporate defaults could reduce the amount of capital available to prospective acquirers," BCG's global study on M&A said.
In India, however, M&A market is hotting up with local companies aspiring to become global, capital becoming much more easily accessible and the regulators adopting a positive stance, BCG India's Director P Harshavardhan said here today.
The pace of M&A activity could also slow down as one of the main drivers - the upswing in the Private Equity (PE) activity currently in ninth year was about to peak, BCG said.
However, PE firm's reserves, which were currently at around USD 250 billion, suggest they have more than enough fuel to sustain their growing involvement in M&A. Last year, the PE firms pumped in USD 660 billion in M&A globally.
However, historically the stock market which also peaked in a 10-year cycle had still few years to go since the bull run began in 2003.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
