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The Impact of Activist Investors – Lessons in Discipline

Corporate Development 2012 – Leveraging the power of relationships in M&A


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One of the ambitions of our annual survey is to spot trends in the marketplace early and analyze their potential impacts on corporate development behavior. We have been hearing and reading a lot about activist investors so we explored what corporate dealmakers think about activists and how they affect the M&A environment.

Newspaper headlines sometimes associate the term “activist investor” with nasty proxy battles, negative media attention and major disruptions to business activities. Yet respondents to Deloitte’s survey seem to have a healthy understanding of how these investors work and less trepidation about them. More than one-third of corporate development executives view the impact of activist investors on M&A to be positive, nearly twice the number who consider it negative. The most popular response, offered by 46%, is that activist investors will have no impact on M&A.

When we asked respondents to indicate the specific ways in which activists might impact M&A, more than half of them expect volleys from activist investors to put more companies in play this year and about 40% forecast more break-ups or carve-outs. Close to 30% indicated that activists could increase competition or deal price and 26% believe it will lead to increased transparency.

For further insights on what Corporate Development executives are thinking related to strategic alliances, read Corporate Development 2012 – Leveraging the power of relationships in M&A.

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