Dealmakers in Davos see more M&A despite geopolitical risks

Fri Jan 23, 2015 5:19am EST
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* M&A deal volumes surged to seven-year high in 2014

* CEOs, bankers, investors see another strong year in 2015

* Driven by U.S. companies and some cost cutting in Europe

By Sophie Sassard

DAVOS, Jan 23 (Reuters) - Low borrowing costs, currency shifts and the hunt for both cost savings and growth opportunities will drive a steady flow of merger and acquisition deals this year despite geopolitical tensions, according to business leaders meeting this week.

Chief executives, bankers and investors gathering at the World Economic Forum in Davos, Switzerland, said they expected U.S. companies to take advantage of a rising dollar and robust growth at home to strengthen their position in global markets.

On the other side of the Atlantic, sluggish growth will encourage European firms to buy revenues overseas and tie up with rivals to cut costs.

"There are always great opportunities in the aftermath of a crisis," said Federico Ghizzoni, chief executive of Italian bank Unicredit. "The key is to be in a position that allows (you) to seize them."

However, an unstable economic backdrop with divergent monetary policies among leading nations, and the possible flare up of conflict zones and diplomatic tensions, pose big risks.   Continued...