New York -Though merger and acquisition volume during the second half of 2009remained sluggish, there are some subtle signs of a pick-up, according to Ernst& Young's Transaction Advisory Services's "Why Capital Matters"survey.
E&Y found that some 25 percent of businesses arelikely or highly likely to make an acquisition in the next six months, a numberthat is projected to rise to 33 percent over the next 12 months and 41 percentin the next 12-24 months.
In this deal environment, the margins for error havenarrowed," said Rich Jeanneret, Ernst & Young Americas vice-chair ofTransaction Advisory Services. "Many companies feel inclined to stash cashand be reactive, but winning companies will be those that have the confidenceto use their capital to seize opportunities."
The unit said factors influencing the M&A landscapewill include: market confidence, access to credit and cash on hand.
E&Y's TAS said the mega-mergers of $5 billion or morewill likely winnow down. In fact, only 145 completed deals broke the $1 billionmark over the past year, versus 400 in 2008 and 609 in 2007.
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