Confidence trick

24 September 2010 By Alexander Smith

The market is doing a good impression of being back on its feet, after a disastrous 2009. But the numbers are flattered by some blockbuster deals. Stronger balance sheets, cheap finance and the need to cut costs mean the ingredients are there. What’s missing is confident CEOs.

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Global mergers and acquisition volumes have risen 21 percent so far this year, with stable activity in the United States and growth in emerging markets offsetting a drop in European dealmaking, according to preliminary data from Thomson Reuters.

Worldwide M&A has totalled $1.678 trillion, while thirdquarter activity totalled $599 billion, up 35.6 percent from a year ago. This marks the third consecutive quarter of growth and the strongest quarter for worldwide M&A in two years.

The United States showed stable M&A activity in the third quarter, totalling $201 billion, down 1 percent from the second quarter, but up 41 percent from the yearago quarter. Europe lagged, with quarterly volume totalling $144 billion, down 15 percent from the previous quarter and down 4.6 percent from the yearago quarter.

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