RISK: M&A activity to climb throughout 2016: KPMG

Cash-hoarding tech firms' acquisition capacities are expected to increase by 90 percent

M&A will increase by four percent over the next 12 months, KPMG predicts, while companies’ capacity to fund M&A growth will rise by 13 percent over the same period.

KPMG expects the European appetite will climb by 10 percent, more than double its predictions for Japan (four percent) and the rest of Asia Pacific (six percent).

“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 digitalization make a compelling case for future strategic adjustments. However, emerging market economies are expected to remain challenging.”

Energy will see the most M&A activity this year, while cash-hoarding technology firms’ capacities are expected to increase by 90 percent.

“Despite recent market jitters, the expectation that M&A activity will remain robust in 2016 is well-founded based on corporates’ ample cash reserves and their desire for growth coupled with consistent demand for quality opportunities from private equity sponsors,” Phil Isom, Global Head of M&A, said.

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