Fasten your seat belt and prepare for take-off, or maybe takeover.
The great mergers and acquisitions (M&A) machine, which ground to a halt in the aftermath of the financial crisis, is gearing up a binge of activity this year. The investment bankers will be rubbing their hands in glee; the corporate advisory profession - the lawyers, accountants and investor relations experts - will be looking forward to big bonuses.
Even the humble business journalist will feel a twinge of excitement. Takeovers are interesting situations to report and comment on, even more so when they are contested, or cross-border, or both. Takeovers represent capitalism in the raw, the corporate equivalent of the Darwinian concept of the "survival of the fittest".
Figures out yesterday from Dealogic, an M&A analysis outfit, showed that in just the first few days of the year, some US$83 billion (Dh304.85bn) of deals had been struck in the US and Europe, compared with $67bn in the same period last year.
On just two days - last Sunday and Monday - deals totalling some $34bn were announced globally.
Why is this happening now? After all, we are just a year or so into recovery from the most vicious financial crisis since the 1930s; world economic indicators are still recovering, and while fears of a double-dip recession have receded, it would be a foolish forecaster who bet the farm on soaraway growth from here on.
So why are investment bankers and chief executives preparing to spend billions on takeovers and mergers?
There are several motives for corporate M&A activity: confidence of executives, perceived opportunities for value creation and availability of cash, or at least credit.
The last of these is perhaps the most significant, and largely determines the nature of the other two. If companies have cash in the bank or access to funding on reasonable terms, it certainly gives executives a bolt of confidence; if you have the resources, you can persuade yourself (or more likely be persuaded by those crafty investment bankers) that there is a mountain of corporate value just waiting to be tapped.
You might think that the financial crisis, which began in late 2007, would have knocked the financial stuffing out of global corporations, but that would be to misunderstand the nature of the crisis we have experienced.
Certainly there was value destruction on a grand scale, but it was largely limited to the property and financial markets where the crisis originated. Outside these sectors, there was a blip in normal economic activity as business executives everywhere wondered whether recession and even depression would follow the financial crisis, but on the whole those fears were not realised.
If you were not a banker or property investor, and lived outside Europe and certain other parts of the world, including Dubai, business went on pretty much as usual.
The world's biggest economy, the US, has responded positively to billions of dollars of central-bank stimulation, known as quantitative easing.
If you were in China or India, you might even be forgiven for failing to notice any crisis at all.
Even in Dubai, the "core" economic activities - trading and logistics, retail, tourism - have recovered quickly, and the rising oil price has given confidence and coffers a boost.
The business psychology at work is interesting. Global executives, warned by economists and policymakers that there was a real chance of a 1930s-type recession, hoarded cash. Capital expenditure dropped and corporate activity, especially cross-border, fell to a level in late 2008 where the FT could declare that they were "dying out".
Now all that saved cash is burning a hole in the pockets of executives everywhere. Shareholders, too, who often profess they feel most comfortable with prudently managed corporations, actually do not like to see managements sitting on piles of cash that could be put to work more profitably elsewhere than the corporate equivalent of under the mattress.
Finally, there is the gradual return of liquidity and credit to the global financial system. Banks have taken big hits, writing off billions against dubious and non-performing loans over the past two years, but the feeling is that the shake-out is over. For companies with a good credit rating, the bank manager's door is wide open once more.
It seems the Middle East will not miss out on the spending spree to come. Figures from Thomson Reuters show that deals in Africa, Central Asia and the Middle East had the highest proportionate rise in the world in 2009, with 867 deals valued at $1.66bn, an increase of 24 per cent.
The international accounting firm Deloitte predicts M&A volumes will double in the Middle East this year, citing the resolution of Dubai's debt problems as the catalyst for a burst of renewed confidence.
Hold tight - it's going to be an exciting ride.
fkane@thenational.ae
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Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The specs: 2019 Subaru Forester
Price, base: Dh105,900 (Premium); Dh115,900 (Sport)
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Transmission: Continuously variable transmission
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Fuel economy, combined: 8.1L / 100km (estimated)
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
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