A report from the law firm Freshfields Bruckhaus Deringer LLP indicates that, while the M&A market is still weak, deals are rising slightly in dollars if not in volume. However, three main factors still challenge any new prospects: financing constraints, regulatory scrutiny, and deal protection measures.
Despite some high-visibility deals such as the bidding war between Dell and HP for 3Par (Dell withdrew), Kraft’s acquisition of Cadbury earlier in the year, and BHP Billiton’s efforts to acquire Potash Corp., 2010 deals in general have been low, although improved over 2009. Things are heating up, however; July and August alone accounted for more than $200 billion of the $632 billion in mergers so far in the calendar year.
The financial services arena seems to be an area in which M&A activity is hot. Schwab announced in August that it would acquire ETF manager Windward Investment Management, Inc., for the sum of $150 million in stock and cash. And Ladenburg Thalmann completed its acquisition of Premier Trust, Inc., on September 3.