Mergers and acquisitions ‘could be high in the tech sector’

Posted 03/02/2011

The technology sector could see a large amount of mergers and acquisitions this year, thanks to its good valuations and returns.

This is according to a new report from KPMG, which states that although most sectors are seeing negative price-to-earning ratios at present, this is not the case in the technology industry.

Telecoms in particular appears to be remaining resilient to the economic downturn, as it is currently experiencing growth of two per cent, meaning it could be a good prospect for investors looking to get involved in mergers and acquisitions.

KPMG spokesperson Jonathan Stankler said consumer demand for new products such as web-enabled televisions mean “technology companies in the mobile data space and the cloud are well positioned to deliver strong growth”.

He added that technological advancements are “providing stimuli to the deal market”.

Last month, Paras Anand from European Assets Trust said he thinks there will be more mergers and acquisitions taking place this year than in 2010 due to people looking to acquire well-positioned businesses at good prices.