M&A Activity on the Rise
After a long period of slow activity, a wave of pre-market Merger and Acquisition (M&A) deals announcements has helped boost major indexes on Wall Street. Announcements included big-names in the technology and pharmaceutical sector.
At the forefront of the merger news is Xerox’s $6.4 billion cash-and-stock deal to acquire Affiliated Computer Services (ACS), a move that could triple Xerox’s services revenue. Other announcements included Abbott Laboratories (ABT) plans to purchase the pharma unit of Belgium’s Solvay for $6.6 billion and Johnson & Johnson acquisition of a $444 million stake in the Dutch biotech company Crucell. Only seven days earlier, Dell went public with its plans to purchase Perot Systems, a transaction value reaching $3.9 billion.
Heat is also intensifying on the IT outsourcing front. The ongoing industry consolidation is increasing pressure on mid-size IT service providers.
M&A activity is apt to be accelerated due to pricing wars between offshore vendors and U.S. and European-based providers. Among those likely to enter the M&A fever are CSC, CGI, Unisys, Capgemini and Atos Origin, says Peter Bendor-Samuel, CEO of outsourcing advisory Everest Group.