Manufacturing mergers and acquisitions set to increase

Almost half of those polled by the company cited a rise in private equity activity as a primary driver for this increase. A significant majority (70%) describe themselves as acquisitive. Ross James, UK corporate finance manufacturing industry leader at Deloitte, said: "While corporate sector fundamentals have been strong, economic uncertainty over the last few years has significantly dampened corporate risk appetite. "However, since the start of the year, stronger economic growth forecasts across many western economies, particularly in the UK, have given a major boost to confidence and, as a result, interest in M&A activity." Emerging markets were the most likely place for acquisitions, with two thirds considering potential acquisitions in these regions. James added: "A significant trend in this survey is the increase of private equity activity in the industry. Nearly 44% of M&A chiefs named [private equity] as a primary driver for mergers or acquisitions in the coming months, up 12% from our Spring 2013 study. It is clear that chief financial officers' increased confidence, coupled with the strong availability of debt, allows for more competition for the available assets – which could push valuations up." A similar number of responses (44%) also identified private equity-owned companies as a primary source of target businesses, up from 28% last Autumn. "The same private equity portfolios have been looking for exits in the market, so we could expect more assets to be available for sale," James said.