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M&A offer intensity - or the number of propositions relative to the total number of public companies - has fluctuated around its historical median since the first quarter of 2017, according to data compiled by Morgan Stanley. The firm attributes the current malaise to uncertainty about the trade war, recession concerns, and higher interest rates.
There have been some recent exceptions, including the $89 billion tie-up between Celgene and Bristol-Myers Squibb earlier this year.
But the broader benign environment means that investors should be paying extra-close attention to any companies that dare to venture out into the dealmaking wild.
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Thankfully, Morgan Stanley has done the heavy lifting and identified dozens of large, liquid companies that are most likely to receive offers for the all their business units in the next 12 months.
Their so-called Acquisition Likelihood Estimate Rankings Tool combines factors such as market cap, debt-to-assets, and dividend yield. Some factors are linked to entire sectors: Healthcare companies, for example, are more likely to get offers, while industrials are not as deal-friendly.
The list has been abridged to include no more than two of the largest companies in each sector.
