Deloitte M&A Index Q2 2014 | 3 Factors influencing M&A Pressure on revenue growth Figure 4. Corporate revenue growth rate vs. share price index (S&P 1200) The S&P 1200 share price index currently stands S&P 1200 index Revenue close to its pre‑crisis high; however revenue Growth Rate (%) growth has been declining since 2012 at a rate of 2,000 20 3%. Companies will be under pressure to maintain 1,800 15 their share price performance. At the same time, 1,600 1,400 10 S&P 1200 non‑financial companies are sitting on 1,200 record piles of cash and the net debt to EBITDA 5 1,000 ratio for US and European companies is 18% and 800 0 8% below their 10‑year average respectively. 600 -5 With confidence levels recovering, M&A activity 400 provides a compelling way to enhance revenues. 200 -10 0 -15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year YoY Revenue Growth Rate (%) S&P 1200 index Source: Bloomberg, Deloitte analysis Changes to the political landscape could Figure 5. Global political scenario – 2014 influence corporate risk and investment appetite General Cases of social elections due unrest and With 21 general elections coming up in 2014, in 2014. emerging crisis. we expect changes to the political landscape may have an impact on corporate risk and investment appetite. Major elections include ones in the key emerging markets of India and Brazil, congressional elections in the US, parliamentary elections in EU and the Scottish referendum. Global Crisis/Social Unrest Major Elections • Ukrainian crisis • Europe – Belgium, Hungary, Georgia, Romania, Slovakia, • Social unrest in Turkey, Egypt, Sweden, Moldova, Lithuania, Turkey, EU Elections Libya, Syria, Argentina • Americas – US Congressional, Brazil, Columbia, Uruguay • Asia Pacific – India, Indonesia, Bangladesh, Fiji, New Zealand • Africa – South Africa, Libya Source: Deloitte analysis