Tricky getting this table in a view-able format (click to enlarge), but here’s a handy guide to potential targets and their possible suitors, courtesy of Richard Kersley at Credit Suisse.
M&A is back in the spotlight, of course, thanks to the Kradbury affair. Adds Kersley:
US and UK companies are cash rich. Strategically speaking, the gap between FCF yield and corporate bond yield, a key driver of M&A, is now at an all-time high in the US. In the last upturn, M&A troughed eight months after the bottom in ISM new orders, suggesting that M&A is set to pick up right about now. Within Europe, the financial position of the corporate sector differs markedly between the UK and the Continent. The former is still indebted but the latter has a record financial surplus, making it the more likely source of activity.
Opportunistic and strategic M&A. Against this backdrop, we have sought the expertise of our sector analysts to assess the appetite for M&A within their sectors, as well as the key players that could be involved in future M&A. In some cases, we expect industries will take advantage of the turmoil witnessed in the last year to increase scale at good value (banks, building materials, and insurance). Some industries view M&A as part of the industries’ secular story, as seen throughout the healthcare space where M&A will be used to combat earnings gaps from drug patent expirations. In other industries M&A is nothing new as seen with the beverage companies, the autos, and telecoms.
Related links:
M&A is not even resting - FT Alphaville
Kradbury: The homespun side of mega-bid battles - FT Alphaville