Global M&A activity dulls for the first three quarters

The global mergers and acquisitions (M&A) market has been dismal in the year's first nine months, battered by euro-zone debt problems and an uncertain recovery in major economies.

For the first three quarters, international M&A activity fell 19.4 per cent to US$1.43 trillion from the same period a year earlier, while Europe is having its slowest quarter in three years, according to a report by data provider Mergermarket, a Financial Times unit. M&A deals in Asia-Pacific excluding Japan dropped 14.8 per cent to US$241.8 billion in the first three quarters.

Firms have found it difficult to grow organically by expanding sales, since China's decelerating growth has cast a shadow over the global economic outlook.

However, despite record piles of cash on hand and inexpensive valuations of potential targets, corporate executives are taking a wait-and-see approach, market participants suggested, until the euro bloc begins to see a definitive resolution to its long-running economic and sovereign debt woes.

Discussing the reasons for the sharp drop in M&A activity, Mergermarket cited the wide bid-ask spread as one of the two major factors affecting the industry.