Result announced in construction industry Mega-Mergers Debate

  • 10 Nov 2014

Michael Willoughby, proposing speaker, wins the mega-merger debate with a majority vote of 60%.

Richard Halderthay, Director of Communications, Saint-Gobain UK, announced the result.

Michael referenced an extremely interesting point that the industry has a two year lag, and is often the last sector to recover after a recession. This, he believes could be helped with the merging of businesses within the sector, taking advantage of the difficult times for confident capital and credit-rich buyers.

Alasdair raised some interesting counteractive points in his position as opposing speaker, adding that if 2015 is to be the year of the merger it would need to come from global titans at a mega scale, to overshadow those who have merged beforehand.

To conclude, the overruling opinion in this debate seems to be that if firms do take the plunge into the Mandamp;A whirlpool it could lead to great things for the industry. Though, it takes courage and bravery from firms willing to merge.

I would like to give my thanks to both Micheal and Alasdair for being our speakers, and extend my appreciation to Howard from Buildingtalk, who very kindly acted as guest speaker and media partner to support this debate. Weve had some thought provoking statements from both parties, who have raised interesting points in reference to market conditions and previous acquisitions, as they considered whether 2015 really is the year of the mega-merger.

Thank you to all who participated by voting and sharing their views on the topic.

Debates key points

Michael Willougbby

Michael Willoughby, Construction industry writer, proposed the motion

  • Some firms with unbalanced portfolios of work who struck over-competitive contracts in recession, are paying the price now.
  • The increasing globalisation of the construction and engineering industry means that takeover offers will not only come from within the UK but from abroad as well.
  • Why 2015? Because the value window is closing. More and more firms in trouble are either going bust or working their way through difficult contracts.

Alastair Reisner

Alasdair Reisner, Chief Executive of the Civil Engineering Contractors Association (CECA), opposed the motion.

  • Its becoming increasingly difficult to see where the bid targets might come from that would top deals in terms of size.
  • Uncertainty about the Eurozone and other global markets is making companies think again about whether now it is the right time to be getting into mergers and acquisition activity.
  • Some advisors will be encouraging potential buyers to buy now when others are fearful.

Buildingtalk says

Howard Chapman, Managing Editor of Buildingtalk

  • Merging businesses can maximise efficiency and profit if done correctly but the wrong mega-merger can also have a profoundly negative impact.
  • How can mega-mergers be made a safer bet when they are sometimes driven by the financial team with an eye on the short term windfall gains?
  • Big opportunities for mega-mergers but could potential future-shocks coming from Europe, Russia or the Middle East make 2015 difficult to predict

Read Howard Chapmans comments in full

Final result

60% voted for the motion that 2015 will be the year of the Mega-Merger

You can follow the latest on Saint-Gobain Debates via Twitter at @SaintGobainUK, search #SGDebate or like the Facebook page.

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