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2013 Deal-Making Predictions

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    Rich Jeanneret of Ernst & Young Americas gives his outlook for M&A in 2013.

  • Duration 3:47
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-- some big news in the -- world today as trading firm get guys agreed to buy Knight capital for one point four billion dollars.

So are there more big deals to come in the new year will and -- activity just can't stay quiet on silence.

Joining us now -- Democrat vice chair transaction advisory services for Ernst and young America's.

Reits you know I thought that everyone has all this cash on there.

Balance sheet and they're saying wants this deal is done we are -- to the races we're gonna go buy stuff.

Well Tracy they want to there's clearly a large pent up demand.

But they're cautious right now the fiscal cliff that instability in Europe with the eurozone slowing GDP growth around the world they're sitting back and waiting it out.

And until you have I think serious resolutions of the cliff.

Further signs that the Arizona stabilize.

I don't think you're gonna see much of a move those two things happen all that's dropping its Iran.

As vice chair of the transaction advisory services group got presume these survey your -- -- you've talked to them and this is what they're saying their stance on their hands.

It I'm out visiting with -- -- exacts and private equity investors all the time in their cautious and until they see some signs of stability in the market.

They're gonna hold backs I think you're gonna see.

Year 2013 much like 2012.

Smaller deals about the same kind of -- by the way they're down double digits again this year.

-- deals meaning below 500 million.

For the most part of its strategic nothing to strategic product fills may -- some geographic place still looking at emerging markets actively.

But I don't think you'll see too many big Blockbuster transformational you -- action private equity -- be the bright spotlight.

Well I think private equity has the enough flexibility to operate outside the public scrutiny say don't have to live quarter to quarter -- -- have to worry about the short term accountability.

And they can take a longer term bet on some -- -- acquisitions.

It's -- about some of the sectors that you think might actually see some activity.

We've been hearing about startups I guess so these can be life science start -- we're talking about here.

I think you'll see some activity in life science else to think you'll see in financial services maybe a little bit consumer products and consumer products they're still a great interest in the emerging markets is that.

Middle class emerges -- we're expected to add three billion people of the middle class the next twenty years largely gonna happen emerging markets they want stuff and they want consumer stuff financial services.

They will continue to still -- -- this aggregate because of the Dodd-Frank -- Basel III getting recapitalize so there should be some activity as well.

And look I think health care and life sciences will continue to converge certainly election sort of settled the issue about.

What kind of regulatory regime -- looking at with health care and so I think you'll see activity to capitalize on the when you talk emerging middle class are we talking about more investments and and and like Latin America I think Brazil and China will be great big -- -- because that's for the populations are.

Say you have Brazil China -- investment in us here at home we see more money coming to us and yes in fact we that we -- -- what's exciting about it is the US is now projected based on our our capital conference from Mercer residency and does twice here.

To be the second most popular destination point for.

Inbound foreign capital I think it's happening because we're more stable economy.

We've got population growth.

Currency -- is cheaper and I think the overall sort of strength of our sovereign sort of picture.

I gives investors more confidence interesting that they want to invest in us but we don't want to be shot to invest outside -- is the only way to grow companies either build something you buy something.

And we're not doing that yeah organic its growth is clearly tougher today you do still see US.

Corporates and investors it it and investing in the emerging markets so they're still a lot of interest in China and India and Brazil.

And sort of the brick emerging economies.

Focused on the trends where there's going to be the best economics like the consumer.

Which -- wish I had better news -- dinner.

Ernst and young America's vice air transaction by users think he's thank you thank you ritual is claim and we'll take us through the last -- trading.

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