Howard Chapman, Editor of Buildingtalk

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Merging businesses can maximise efficiency and profit if done correctly. But the wrong mega-merger can also have a profoundly negative impact on both asset bases. We all remember the disaster mergers such as Daimler Benz/Chrysler and AOL/Time Warner.

Even the fall-out from still-born potential mergers like Carillion/Balfour Beatty can also adversely affect business in the short term. For

example, is it why Balfour Beatty missed out to Skanska on a andpound;600m Battersea Power Station project? And in the latest mega-merger, building materials groups Holcim and Lafarge plan to create the worlds biggest cement group, with a andpound;26bn-turnover firm. However it still has to sell some UK assets to secure regulatory approval and is finding this difficult with HeidelbergCement now pulling out of the bidding.

But still Mergers andamp; Acquisitions (Mandamp;A) is where big money is made and the pace is hotting up some say we are in the strongest Mandamp;A bull

market since 2008. For example Google has spent $4.6 billion on acquisitions in Q1 Q3 this year compared with $1.3 billion for the same period last year.

How can mega-mergers be made a safer bet? They are often driven by the financial team of a successful company, perhaps with an eye on the short term windfall gains or dare I say it, personal gains but proper early due diligence can sometimes help expose the can of worms that would have destroyed a good business with a bad merger.

Looking at the opening remarks in the Debate, it seems both pundits agree on the potential opportunities. However some of the future-shocks that may come from Europe, Russia or the Middle East make 2015 difficult to predict.

Michael Willoughby, proposing the motion, rightly highlights that increasing globalisation of the construction and engineering industry means mega-mergers could come from overseas but sees this as potentially good business for UKplc. It brings in talent and resources too. Interestingly, in the FT list of 50 top companies acquiring business in the UK, 12 are French, including Saint-Gobain.

Alasdair Reisner, opposing the motion, thinks difficulties in the Eurozone and other global markets will make companies think again about whether now it is the right time to be getting into Mandamp;A activity so 2015 may not be the year of the mega-merger. The UK potential exit from the EC may also adversely affect this, though some would argue that it opens up opportunities for the UK to become an even bigger hub for world business.

It would be great to have your comments on what other dynamics could make 2015 the year of the mega-merger. For example: the uptake of BIM, UK companies winning major overseas projects; residual Olympic factor affects; Government waking-up to the significance of construction to the economy; massive overseas investment in UK infrastructure.

Finally, it would be interesting to get opinions on whether mega-mergers are really good for business or are they just advancing globalisation further down the road to ruin?

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