Tracking the 2018 trend in mergers and acquisitions
With the changing of the calendar comes speculation about the year ahead.
Fordham News spoke with faculty from across the university to get their predictions for 2018, and Sris Chatterjee, professor and Gabelli Chair in Global Security Analysis, explained what he saw on the horizon for mergers and acquisitions (M&A).
“2017 has been a very good year for M&A,” he said. “With the economy continuing to show strong fundamentals and the new tax law, 2018 is most likely to continue this upward trend in merger activity.”
He added that “Fintech and digital technology represent a major disruptive force that will shape many mergers in 2018. We have already started to see this trend in 2017 when many companies across different industries outside the tech-sector acquired firms with the desired digital capabilities.”
However, Chatterjee cautioned, “these positive aspects of a stronger M&A outlook in 2018 need to be balanced against other factors that may have a restraining effect. The first factor that comes to mind is the effect of the U.S. government’s decision to block the AT&T-Time Warner merger. AT&T is fighting this decision in court, and the outcome will have an important effect on M&A activity in 2018. The second factor to consider is that market multiples are already high, perhaps too high in light of meager growth. This, coupled with the high average premium that we witnessed in 2017, means that deals, on average, are going to be pricey.”