Half of Fortune 300 and Fortune 500 companies expect to be active in domestic mergers and acquisitions in 2006, according to a new report from Greenwich Associates.
"The industries that will be the most active in international M&A, according to expectations reported here, are chemicals, consumer products and non-bank financials," Greenwich consultant Jay Bennett said in the report. In addition, 80% of media companies and nearly 55% of bank holding companies expect to be M&A participants next year.
Nearly 30% of companies with more than $5 billion in annual sales plan to increase allocations to acquisitions and strategic investments, according to the report.
In corporate finance, 10% of larger U.S. companies, typically public, plan to do a common stock transaction next year, while 30% plan to do a public bond offering in the United States, 5% plan to do a bond offering in Europe and 10% plan to use asset-backed securities within the next year.
The survey of more than 800 CFOs, treasurers and corporate development officers also found that U.S. companies continued to find fewer Wall Street analysts covering their companies.
"The reductions have been most pronounced in the smallest companies included in our survey, which have annual sales of less than $2.5 billion," Mr. Bennett said in the report. "Among these companies, more than a quarter experienced a reduction of coverage in the last year, as did about 25% of below-investment-grade companies."