Equity Strategy
Five Reasons Behind the M&A Boom
Thu 5th August, 2021

Despite being in the middle of a global pandemic, Merger & Acquisition (M&A) activity has accelerated meaningfully through 2021.

We estimate that ~5% of the market cap of S&P/ASX200 is under pending or formally announced M&A since January 2021. If maintained until year-end, that implies an annualised run-rate of ~10%

Conditions for deal-making are unlikely to slow near term. During prior M&A cycles deal activity peaked at ~20% of (ASX 200) market cap being acquired.

Past M&A cycles have often coincided with a peaking of both economic and market cycles. We are less convinced of this view this time around. A number of factors we outline behind the current M&A cycle have the potential to be quite enduring.

We outline five reasons behind the current boom in M&A. We also identify a number of potential M&A candidates within the S&P/ASX 200.

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  • Mergers
  • Acquisitions
  • ASX
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Written by

John Lockton, Australian Equities

John is a leading investment strategist with 20 years experience.

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