By Abigail Summerville
NEW YORK (Reuters) – Companies that are considering acquisitions should use a slowdown in deals to scope out potential targets, Anu Aiyengar, global co-head of mergers and acquisitions at JPMorgan Chase & Co, said Wednesday.
M&A activity has stalled in the face of uncertainty over valuations, interest rates, inflation, recession prospects, consumer demand and regulation, Aiyengar told an Axios conference in New York. Still, companies should build relationships with potential targets so they can be ready to strike when conditions improve, she said.
Aiyengar said it was an ideal time to “proactively reach out to start a relationship so that whenever it is that the seller decides to sell, you’re the first call.”
She also expects a greater share of deals in healthcare after an abundance of technology transactions in recent years. Healthcare M&A has typically risen during historical downturns, she said.
For large companies or private-equity firms sitting on cash that want to buy, “this is a great environment” because they are able to pay for acquisitions with mostly cash, Aiyengar said.
The executive opened with a comment on Elon Musk’s buyout of Twitter Inc. “The company, our client Twitter, plans to close the deal on the previously agreed price and terms,” Aiyengar said. The closing deadline is on Friday and JPMorgan and Goldman Sachs are Twitter’s financial advisers.
(Reporting by Abigail Summerville in New York; editing by Lananh Nguyen and Cynthia Osterman)