Gloom Affecting M&As
Recent data out shows that mergers and acquisitions activity fell 25 percent worldwide in the first half of 2012. The U.S. alone fell 44 percent in M&A activity. According toThomson Reuters data, announced deals totaled slightly more than $1 trillion globally through June 19, down from $1.33 trillion over the same period last year. Companies have become more reluctant to risk a significant portion of their assets to acquire companies or to take on the potential liabilities of other companies as global economic uncertainty continues.
There is a flip side to the significant decrease in M&A activity. A vast majority of M&A (of which acquisitions account for approximately 97%) fail. In fact, as many as 70% of acquisitions fail, so maybe this wariness to merge or buy other companies isn't a bad thing after all.