Manama: KPMG International’s Global Mergers and Acquisitions Predictor expects the world’s largest businesses to show an increasing appetite this year.
The appetite to do deals was predicted to rise by four per cent, and the capacity of corporates to fund merger and acquisition growth by 13pc, as companies continue to pay down debt and bolster their cash reserves, KPMG International said.
With the Chinese economy cooling down, the US starting to raise interest rates and oil prices depressing the economies of oil exporting countries, uncertainty has increased significantly.
“We expect strong transactional activity in many western economies in 2016 with healthy balance sheets, profit levels and strong liquidity in the debt markets among the highlights,” said Leif Zierz, KPMG International Global head of deal advisory.
“Increased sector convergence and ongoing digitalisation make a compelling case for future strategic adjustments. However, emerging economies are expected to remain challenging.”
According to Ramachandran Narayanan, partner and head of deal advisory at KPMG Middle East and South Asia, GCC countries significantly contributed to regional merger and acquisition deals.
“Around 65pc of Middle East and North Africa (Mena) deal making for the first quarter was attributable to GCC countries. The region attracted a combined investment of $4.57 billion across 64 transactions, of which 23 had UAE targets while Saudi Arabia and Kuwait had 15 each, Oman had seven and Qatar and Bahrain had two each” he added.