Another view on the M&A Market in 2010 and 2011

Posted on Friday, 19 March 2010. Filed under: Commentary, Mergers |

On Thursday, 18 March, the Financial Times in a special section (‘Deals and Dealmakers’) had an article that I authored entitled:  ‘A tough challenge for M&A markets’.  In it, I argue that that a number of unavoidable behavioural factors are the principal impediments to a rising M&A market:  just as the growth of the market from 2004 to 2007 was driven by some of these factors, there will be a stickiness to the lack of M&A activity over the next year or two.  I’ve touched before on some of these behavioural factors (see ‘Mergers & Acquisitions and Behavioural Finance‘), but have expanded the discussion in the FT article to include additional factors such as optimism, over confidence, belief perseverance, data anchoring, bias towards recent events, and, of course, management hubris. 

I would very much like to see more debate over the role of behavioural finance in the mergers and acquistitions market, and would welcome further comments here.

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