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March 24, 2014

US CEOs and CFOs predict M&A increase in 2014: KPMG

Nearly three quarters of US chief executive officers and chief financial officers said their company will make an acquisition in 2014, according to a KPMG US survey on M&A.

The findings signal an upward trend as in the survey last year only half of the respondents said they pursued a merger or acquisition in 2013.

Recessionary fears and slow economic growth were the greatest inhibitors to M&A, according to a third of respondents, while large cash reserves will be the most significant facilitator for deals in 2014, according to nearly 30% of respondents.

The SME market is expected to dominate, with 91% of chief executives and chief financial officers expecting their acquisitions to be valued under $250m and 41% of respondents said corporate buyers would have an advantage over equity buyers.

A third of executives also said they expect their organisations would complete a divesture in 2014, a slight increase from the 30% who said they did so last year.

The survey also found the US is the most popular area for M&A, followed by Western Europe, and expanding global reach was the most popular reason given for it.

Dan Tiemann, KPMG’s Americas transactions & restructuring lead said "organisations hold massive amounts of cash, interest rates are expected to remain low in the near term, and consumer confidence is rising. These signs of improvement point to a general feeling of optimism in the corporate and private equity arenas"

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