Quotebox: M&A leaders on first quarter dealmaking

HONG KONG/NEW YORK Fri Mar 25, 2011 6:19am EDT

A miner walks through the darkness in a potassium mine near the city of Berezniki in the Perm region close to Russia's Ural mountains March 16, 2011. PREUTERS/Sergei Karpukhin

A miner walks through the darkness in a potassium mine near the city of Berezniki in the Perm region close to Russia's Ural mountains March 16, 2011. P

Credit: Reuters/Sergei Karpukhin

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HONG KONG/NEW YORK (Reuters) - Global mergers and acquisitions activity has been worth $717 billion so far this year, a rise of 58 percent from the same period in 2010 and the best start since the first quarter of 2007.

The following quotes are from international dealmakers on the first quarter's M&A, their forecasts for the year and on market volatility due to the natural and nuclear disaster in Japan and social unrest in the Middle East.

ANTHONY SWEETMAN, HEAD OF CORPORATE ADVISORY, UBS AUSTRALIA

"We will continue to see strong activity in mining and resources and energy, driven largely by continuing growth in Asia. It's hard to see that stopping. Most of that activity will be cross-border which is really what we have seen in the last two to three years."

"One of the challenges is the ongoing macro economic uncertainty. The U.S. economy appears to be improving but there continues to be uncertainty regarding European debt issues, the longer term affects of events in Japan and unrest in the Middle East and North Africa."

ROHIT CHATTERJI, MANAGING DIRECTOR, INVESTMENT BANKING, J.P. MORGAN INDIA

"We find ourselves in reasonably good flow of conversations at the moment, but the headlines have been somewhat muted in terms of the number of announced deals in Asia in the first quarter.

"Sponsor activity should pick up as the public equity markets are temporarily sluggish. Natural resources and industrials should lead deal flow this year from India. The crisis in Japan could slow down temporarily the discussions involving Japanese companies looking at India, but I expect it to be only for very short term."

MAYOORAN ELALINGAM, HEAD OF MERGERS & ACQUISITIONS, SOUTH EAST ASIA, DEUTSCHE BANK (DBKGn.DE)

"Before recent events in Japan, the outlook on Southeast Asia M&A activity for 2011 was very strong. There is a lot of cross-border inbound interest from multinationals, including the Japanese, who are generally accustomed to taking minority positions in companies that are attractive on a long term basis.

"What has happened in Japan doesn't affect the growth prospects of the Southeast Asian markets in any real respect - the fundamental domestic growth drivers remain intact and our view is that confidence will be a little shaken, but only momentarily. We expect that many companies will generally adopt a bit of a wait and see approach at this point in time but it will be more of a pause than a stop.

"Multinationals are continuing their pursuit of growth in developing markets and Southeast Asia offers many attractive opportunities. Japanese companies generally have strong balance sheets and I don't think most will be affected in any material way in terms of their long term growth ambitions."

GIUSEPPE MONARCHI, HEAD OF M&A FOR EMEA, CREDIT SUISSE GROUP (CSGN.VX)

"Financing has become more expensive over the last few days. There has been a lot of volatility so lenders are being a bit more cautious -- and that will have an impact on deal prices -- but I haven't seen an M&A deal pulled yet for lack of financing. The effects may still be only temporary."

ROBERT KINDLER, GLOBAL HEAD OF M&A, MORGAN STANLEY (MS.N)

"There is a lot of uncertainty in global markets now. The deals recently announced have been in the works for a while.

"The overall year should be up, but these are very significant and serious events, and the kind of volatility they are causing (will) have some effect (on M&A discussions).

"I think M&A volume should be up 10-15 percent for the year overall."

LIAM BEERE, CO-HEAD OF M&A FOR EMEA, UBS AG (UBSN.VX)

"I expect we will see a more gentle recovery than the previous cycle. Business volumes are up year-on-year, although activity remains somewhat subdued."

HERNAN CRISTERNA, HEAD OF M&A FOR EMEA, JP MORGAN (JPM.N)

"We have good visibility and confidence through the second quarter. At this point, the conflict in Libya is a new source of uncertainty and we can't yet foresee its consequences, but for the time being, it is not denting the can do attitude we see in the market."

RICK LEAMAN, MANAGING DIRECTOR, MOELIS

"It feels like a typical M&A recovery; maybe not as robust as it was in the mid 2000s or 1995-1996, but based on our backlog and what we're seeing in the market, activity levels are definitely improving.

"There are two forces at work -- the fact CEOs have a better outlook on the future may lead them to not want to sell, by the same token, that same outlook in all likelihood will have them be more willing to be aggressive on the buyside.

"A couple of things need to happen to have a robust market -- you need to have a view on forward earnings; you need to have the capital markets support transactions; and you have to have boards wanting to take the risk to pursue transactions."

STEPHEN TRAUBER, GLOBAL HEAD OF ENERGY AT CITI (C.N)

"I think the fact that we're seeing a lot of tension in the middle east and the potential for oil prices to go higher -- that's why we have people on the sidelines waiting ... (to do energy deals). I think we need to see some stability, to see some easing on the oil price to recognize that maybe we're near the top."

SCOTT BOK, CHIEF EXECUTIVE OFFICER, GREENHILL & CO

"All aspects of the financial crisis were good for our recruiting.

"The fact that the stock prices of the large firms went down so much, the fact that some of them went bankrupt, the fact that some of them had extraordinary volatility in their earnings, the fact that they had a lot of public discussion about the compensation policy -- I think all those things combined to drive really good people out of those big firms into firms like ours."

EDUARDO MESTRE, VICE CHAIRMAN, EVERCORE PARTNERS

"It's still a big market out there and we can grow and be very successful because we are smaller. Our market share is significant, but is not overwhelming so it's easier to grow."

JACK MACDONALD, CO-HEAD AMERICAS M&A, BANK OF AMERICA (BAC.N)

"We expect the M&A market will continue to be robust for the balance of 2011. All the fundamentals exist -- improving economy, improving credit environment, high CEO confidence. Given these fundamentals, global M&A could be up in excess of 20 percent in 2011.

"The economy is improving and, in general, clients' core businesses have improved over the past two-year period, so CEOs and boards are feeling more confident about looking externally for growth.

"At the end of the day, large-scale transactions have been well-received. The market is rewarding good, strategic M&A transactions. When CEOs and boards see market receptivity to large scale deals, they are more apt to move forward with their strategic initiatives. It's part of M&A physics.

"Credit markets are wide open for financing large scale transactions relative to where we were six to 12 months ago.

"While we haven't seen much of an impact on M&A activity yet, it's still too early to see the full implications of the situations in Japan and the Middle East."

(Reporting by Victoria Howley, Megan Davies, Sumeet Chatterjee, Michael Smith and Saeed Azhar; Editing by Andre Grenon and Muralikumar Anantharaman)

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