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Continued economic uncertainty means mixed outlook for global M&A activity, says Taxand

Global mergers and acquisitions activity is on the increase, according to Taxand, an organisation of tax advisers to multinational businesses.

However, the organisation warns that the increase is marginal. M&A activity continues to be inhibited by pressures from the global economy. With such a large disparity in M&A activity levels the outlook is mixed.
The number of M&A deals in the Eurozone fell as these countries continued to struggle in the economic climate. Deal volume also slowed down in the Asia-Pacific region although this follows high activity and the region is seen by many as a growth area. M&A activity in the Americas increased thanks to several mega deals and more attractive financing conditions.
Dealmakers are gaining in confidence and there is cautious optimism for the future: businesses with planned investments held off during the recession are now sitting on large cash piles. Early signs of an uptick in M&A activity are on the horizon as these businesses seek out better returns with more favourable interest rates. M&A debt financing, tax efficient supply chain planning and new regimes for intellectual property can help stimulate M&A activity.
Taxand’s Global Guide to M&A Tax covers 35 countries and provides a desktop reference of the latest legislative changes, tax incentives and the general treatment of mergers and acquisitions worldwide. The guide answers dealmakers’ questions around tax implications and opportunities to consider when undertaking any M&A activity.
Ian Fleming, Taxand’s global M&A tax leader, says: “Despite on-going economic uncertainties there are opportunities for M&A: add-on acquisitions and spin-off transactions are proving profitable. Confidence in the Boardroom is building. Businesses are being less risk-averse.  And while some countries are focused on filling their budget deficit, reducing/eliminating tax relief or imposing other restrictions, a number of jurisdictions are encouraging inward investment by changing legislation around corporate tax rates or introducing new incentives. 
“Every merger and acquisition has tax implications. Many create tax opportunities that can get overlooked in the rush to get the deal done. With careful planning multinationals can maintain a tax advantage throughout the lifecycle of your investments. We hope this guide provides some of the insight you need to identify these opportunities.”

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