KPMG issues M&A predictions

According to the KPMG International Global M&A Predictor, global appetite to do deals is predicted to rise by four per cent over the next 12 months, thanks largely to increased corporate confidence.

Capacity to fund M&A growth, meanwhile, is expected to rise by 13 per cent over the same period, as companies continue to pay down debt and bolster their cash reserves.

“We expect strong transactional activity in many western economies in 2016 with healthy balance sheets, profit levels and strong liquidity in the debt markets among the highlights,” Leif Zierz, KPMG’s international global head of deal advisory, said.

The firm noted that with the Chinese economy cooling down, the US starting to raise interest rates, and oil prices depressing the economies of oil exporting countries, uncertainty still remains.

“Increased sector convergence and ongoing digitisation make a compelling case for future strategic adjustments. However, emerging market economies are expected to remain challenging,” Mr Zierz said.

[Related: Conditions ripe for corporate takeovers]