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Chief Market Strategist
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  M&A transaction announcements have been rewarded in 2012
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View from the Observation Deck

  1. The average one-day premium (offer price vs. previous day's closing price) for global M&A transaction announcements this year is 36.9% (thru 3/6), according to S&P.
  2. Since 2001, the highest average for a calendar year was 37.1% in 2009.
  3. According to data just released from Accenture, M&A deals made from 2002-2009 created shareholder value for the acquirer 58% of the time.
  4. Studies in the 1990s found that the merger failure rate was as high as 70%.
  5. That type of track record is why, for some investors, capturing the premium-paid in the initial stages of an acquisition is so critical.
  6. Global M&A deal volume is off by approximately 16% (y-o-y) so far this year, according to Fortune. U.S. activity is down 60%.
  7. The sluggishness is being attributed largely to geopolitical stresses and activity is expected to rebound. The world's largest corporations remain awash in cash.
Posted on Tuesday, March 13, 2012 @ 4:15 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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