Merger mania: who will be next?
Published:  23 September, 2009

LONDON: City analysts predict an upsurge of merger and acquisitions in the building material sector following Balfour's acquisition of Parsons Brinckerhoff.

Richard Kersley, analyst at Credit Suisse predicts house building and building materials as the most active areas for mergers.

In a list of potential deals, he identified Bellway, Bovis, and Redrow as potential targets for Persimmon. Kingspan, Weinerberger, and Travis Perkins are also expected to attract the attention of CRH, Saint-Gobain, and Holcim.

Mr Kersley said: "We expect industries will take advantage of the turmoil witnessed in the last year to increase scale at good value."

William Davies, head of European equities at Threadneedle said: "Taking over rivals and stripping out costs is a good way of boosting earnings and reducing competition. Once a wave of mergers and acquisitions starts it tends to gather momentum as companies fear that they may be left behind in the quest for growth."

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