Who Are the Predators and the Prey?
The most active acquirers now are financially sound companies with strong balance sheets, high profitability, and sufficient cash to capitalize on the weaknesses of competitors. They can take advantage of the current low valuation levels to transform their industry and improve their own position within it, according to BCG. Transactions over the last year have often been in industries such as finance and automotive, which are on the ropes. But there are also opportunities for large-scale transactions that could transform the competitive landscape of other industries, including currently robust sectors such as pharmaceuticals and utilities. Other potential predators include private-equity (PE) firms, which have around $500 billion at their disposal, and sovereign wealth funds, which were sitting on assets of more than $3 trillion before the crisis started. Many of the targets for M&A in the current crisis have been in sectors hard hit by the credit crunch, such as financial services and
