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Divestitures to dominate M&A activity: JP Morgan

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By Reporter
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2 minute read

Australian mergers and acquisitions (M&A) activity is expected to be up moderately on last year, with non-core divestitures and de-mergers to dominate in 2014, according to .

JP Morgan vice chairman of investment banking for Australia and New Zealand, Jon Gidney, said the “buyers' strike” that halted M&A activity before last year’s federal election was not entirely political.

Instead, poor deal flows were caused by a “perfect storm” of factors including uncertainties surrounding the Chinese economy and commodity prices in general, cost pressures, a high Australian dollar and weak business sentiment, said Mr Gidney.

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“This year, while business confidence is starting to improve, Australian corporations will be focusing on maintaining strong balance sheets and refining their strategic focus, in some cases involving non-core divestments and demergers,” he said.

“There is still a significant price gap between buyers and sellers and paying up for synergies requires a high level of confidence,” Mr Gidney said.

Divestitures to dominate M&A activity: JP Morgan

Australian mergers and acquisitions (M&A) activity is expected to be up moderately on last year, with non-core divestitures and de-mergers to dominate in 2014, according to .

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