Mergers and acquisitions around the world slowed to their most sluggish pace since 2009 in the first half of 2013, Thomson Reuters data shows, as recession-hit European companies put the brakes on transactions and their healthier U.S. counterparts took a cautious approach amid market uncertainty.
Reuters reports that some U.S. companies took advantage of cheap financing and abundant cash to strike big deals early this year. More CEOs have recently taken a pause, though, partly because of worries that they might find themselves overpaying for assets if interest rates rise, which would likely pull stock markets lower.
Dealmakers say activity may slow down further in coming months. Outside the United States, confidence has yet to return in austerity-hit Europe, and many Asia-Pacific economies such as China have been slowing after years of blistering growth.
'Many people believe that the stock market has run up in a way that's unnatural, supported by the lack of yield in the fixed income market and government-supported low interest rates', said Paul Parker, head of global corporate finance and M&A at Barclays.
'If you believe that there's going to be a stock market correction, you'd need to be cautious about agreeing to a transaction in cash or largely in cash'.
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