The preliminary agreement between Anheuser-Busch InBev and SABMiller on a $104-billion merger came just a day after Dell said it would buy EMC for $67 billion in the biggest-ever tech-industry takeover.
Those deals helped put 2015 on pace for a record $400 billion in mergers worldwide, which would surpass 2007, the last year of hot activity before the global financial collapse and Great Recession froze everything.
Even before either of those megadeals, the global M&A market was on pace to hit the highest levels on record, with $3.2 trillion worth of deals through mid-September, up 29% from the year-earlier period, according to Dealogic. And a recent report by PricewaterhouseCoopers said that 54% of U.S. CEOs intended to consummate an acquisition this year.
“The urge to merge is still greater than fears about the global economy,” a Fortune writer observed. And the current dealmaking activity “has pushed the price tag for acquisitions up as well.”
The food and beverage industry has been the M&A leader to date, with $127.5 billion in deals in that sector this year, excluding the beer companies merger, Dealogic said, up 32% from 2014.
Across sectors, trends fueling the current merger fever include the fact that some Fortune 500 companies, as well as venture capitalists, have been sitting on record amounts of cash for a few years—a number that has been rumored to equal $2 trillion—while companies seek the right places to deploy all their capital.
“There are oceans of cash” available in the CPG industry among others, Tom Pirko, president of Bevmark Consulting, told CEO Briefing. “It has to be spent on something, and money flows to the companies that get bigger.”
In addition, borrowing rates remain extremely low in advance of an expected Fed bump-up in interest rates as soon as December, and CEOs are trying to beat the expected increase; a stronger economy is still expected to emerge in 2016, and low valuations of many companies still haven’t caught up to the recovery.
“The current trend has the increase in M&A activity greatly outpacing cap-ex activity,” noted a recent analysis by Bilzin Sumberg Baena Price & Axelrod, a commercial law firm. “Simply put, CEOs are betting that acquiring companies is a more efficient and effective use of company resources than growing the company organically through reinvestment in capital improvements.”
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
