M&A boom sees 60% of global firms in market to buy

Globe

Global companies'appetite for acquisitions has hit a six-year high, with nearly six out of every 10 companies hoping to lock in a deal, data out on Monday showed.

Of the more than 1,600 executives across 53 countries polled by EY, 59 percent had plans for their company to make an acquisition in the next 12 months. This was the highest appetite recorded in the six-year history of the global capital confidence barometer poll.

Oil and gas was the sector with more interest in striking a deal than any other, the data showed, followed by consumer product firms and mining and metals.

"This year has seen resurgence of deals coming back into the market," global vice chair of transaction advisory services at EY, Pip McCrostie, told CNBC.

"We have had five years of really subdued appetite. You have got a low growth environment and organic growth on its own is not enough."

Over 80 percent of executives were optimistic about the global economy, despite the recent turbulence seen in global financial markets.

But while appetite is booming, executives are not willing to pay any price for a deal it seems.

"We have got almost three quarters of the executives saying we will walk away and we have walked away," McCrostie said.

"They are saying if the price is too high, too toppy, we will walk away. If regulatory is too complex, we will walk away. So they are being much more judicious in their processes."

Some 45 $10 billion-plus deals were announced in the first nine months of the year according to Dealogic data, with $10 billion-size deals accounting for around a third of global M&A volume.

The combined total volume of bumper deals has amounted to $1.15 trillion so far this year, up 89 percent from the same period in 2014 and the highest first nine months volume and activity on record, Dealogic said. Volume was dominated by 33 U.S. targeted $10 billion-plus deals totalling around $860 billion.

Some of the biggest deals announced this year include Royal Dutch Shell's purchase of BG, valued at $81.5 billion by Dealogic. This was cleared by the European Commission last month.

JefferiesAnd the Best Place to Work in the global financial markets 2016 is...

Register for Financial Markets News Alerts