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Market Spotlight: Corporate Governance

Market Spotlight: Corporate Governance

02 May 2017

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Activist campaigns remained steady throughout 2016, reaching the third-highest annual count since 2009. While the year’s campaigns fell short of 2015’s record-breaking totals, the number of companies facing demands continued at a steady pace, notably among European and Asian companies. In the US, 456 activist demands were made on businesses, up from the 418 made in 2015. In Europe, there have been several high-profile examples of activists obtaining boardroom seats — including companies within the FTSE 100. Finally, in Japan, a surge in activity resulted from Prime Minister Shinzo Abe’s support for shareholder activism as part of a plan to revive that country’s economy.

In order to understand 2017’s latest trends in corporate governance, shareholder activism, and M&A, Donnelley Financial Solutions commissioned Mergermarket to interview global dealmakers for their views.

Key findings include:

  • 72% of participants predict that activist-driven M&A will increase in the coming 12 months (32% believe significantly so).
  • The main drivers of increased activist activity are expected to be pressure to merge with competitors, pressure to spend cash on acquisitions, and pressure to do alternative deal types.
  • Financial services is the sector cited most likely to receive the highest amount of activist-driven M&A activity in the next 12 months.