DIVA SYNERGY UCITS FUND - Bernheim, Dreyfus & Co.

M&A Market in 2011
Positive market outlook for mergers and acquisitions (+55% in Q1 2011)
DRIVERS /
CATALYSTS
CONSTRAINTS
CONSEQUENCES
• Savage cost cutting, capital raising and debt refinancing , strong balance sheets – to be opportunistic if a deal is presented
• Attractive price of assets
• Buying growth through acquisition may be more attractive than organic growth - given concerns about the pace of
recovery of Europe and the United States
• Growing pressure on firms to focus on core activities and spin off the rest
• Low interest rates
• Access to credit
• Market volatility
• Antitrust
• Due to lower equity market ratings and the constraints on credit greater proportion of stock to be used for M&A rather
than cash
• Need for a crystal clear strategic rationale
• More hostile bids
• Buyers with strong balance sheets likely to take advantage to snap up rivals at bargain prices
• Corporate activity will be focused on cost-cutting rather than the bull-market justification of buying growth
• Creativity in structuring transactions and managing volatility in stock deals will be key differentiating factors
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