Quotebox: Dealmakers on mergers and acquisitions outlook

NEW YORK Thu Jun 23, 2011 8:37pm EDT

The sun lights the exterior of the New York Stock Exchange, as people walk past on the shadowed street, July 16, 2008. REUTERS/Chip East

The sun lights the exterior of the New York Stock Exchange, as people walk past on the shadowed street, July 16, 2008.

Credit: Reuters/Chip East

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NEW YORK (Reuters) - In the second quarter, announced mergers and acquisitions totaled $611 billion, down 23 percent from the first quarter, marking the first consecutive quarterly decline since the first quarter of 2010, according to preliminary data from Thomson Reuters.

Still, boosted by a strong first quarter, worldwide M&A has risen 40 percent so far this year to $1.4 trillion. That marks the best start of a year since the first half of 2008.

The following are quotes from top dealmakers on the outlook for deals during the remainder of the year.

Jeff Raich, managing director and co-founding partner of Moelis & Co

"We are currently seeing our pipeline build and, as a result, I believe we will see a re-acceleration of activity in the back half of the year.

"Many of the factors driving corporate M&A remain in place especially as corporates look to supplement organic growth through smart strategic acquisitions.

"Private equity firms want to be active, but the real issue is a scarcity of high quality assets for them to buy, and there is competition from strategics."

Richard Campbell-Breeden, head of M&A for Asia ex-Japan at Goldman Sachs

"Weaker equity markets at this stage of the M&A cycle is a positive because most deals are likely to be paid in cash. In a low interest rate environment where corporate gearing levels are also down, there is strong demand for cash deals."

Paul Parker, head of global M&A, Barclays Capital

"People are anticipating sluggishness because of the overhang. Momentum has all been in the right direction, but there are some very meaningful potential setbacks.

"On the other hand, I still see a lot of activity and lot of demand. Furthermore, there are a number of significant structural factors that will continue to drive M&A activity."

Ehren Stenzler, co-head of US M&A, UBS

"We have seen a bit of a slowdown in the past couple of months but our view is that it is temporary.

"The dynamics in place to drive M&A activity should continue to do so -- CEO and board confidence, overall balance sheet strength and attractive financing markets, corporate cash positions, strong investor receptivity to M&A and private equity desire to put money to work.

"It is a market right now that is very receptive to M&A. On average, acquirer's stocks have been up on announcement of transactions this year, which certainly isn't the norm. Positive stock price reactions have been especially pronounced in strategic, highly synergistic combinations."

(Reporting by Michael Erman, Soyoung Kim, Denny Thomas, Paritosh Bansal and Nadia Damouni; Editing by Steve Orlofsky)

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