Morgan Stanley: M&A market set for gentle recovery

30 December 2009

A leading analyst at Morgan Stanley has predicted that the mergers and acquisitions market will not continue to match the recovery levels shown in this quarter.

The fourth quarter of 2009 has seen M&A deals increase in value by 52 per cent, a surge helped by takeovers carried out by Exxon Mobil and Berkshire Hathaway.

Berkshire Hathaway, which is owned by billionaire investor Warren Buffett, agreed to pay $34 billion to take control of Burlington Northern Santa Fe (BNSF) last month, as well as taking on $10 billion worth of BNSF debt.

But Dieter Turowski, Morgan Stanley's head of European M&A, told Bloomberg that this pace of growth is unlikely to be sustained next year.

"If you look at previous M&A cycles, the first year after the trough is always one of gentle recovery before things pick up," he said.

"It's going to take us a couple of years to get back up to peak volumes."

By Gary Cooper

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