Baby Boomers Fuelling U.S M&A Activity As China Home Prices Rise

The pandemic was a double-edged sword that triggered serious repercussions while also giving rise to unique opportunities. The small business landscape felt the full force of the pandemic, with some businesses going under as others blossomed.

M&A Activity 

Similarly, bullish baby boomers are helping fuel the merger and acquisition market. A survey by BizBuy Sell indicates that most of the buyers snapping up small businesses that thrived amid the pandemic are baby boomers.

Low-interest rates, PPP loans, and other government assistance have been factors that have helped fuel the buying spree among baby boomers. The bullish sentiments in the M&A market is now seen as one of the factors that is fuelling a dramatic increase in prices.

The NFIB Small Business Optimism Index indicates a 36% increase in the number of owners raising prices.  It represents the highest reading since 1981. While the buying spree of small business is yet to reach pre-pandemic levels, it is picking up steam. Some of the businesses attracting more deals include liquor stores, home improvement businesses, e-commerce sites, and medical businesses.

Rising Home Prices 

China is another country experiencing a spike in prices, this time in the real estate sector. Home prices grew at the fastest pace in more than eight months in April. Home prices in 70 cities rose by 0.48%, up from a 0.41% gain in March.

The spike in prices comes on a spike in demand as investors increasingly turn to real estate to hedge against rising global inflation. In response, residential sales have more than doubled this year compared to last year.

Prices in the oil markets also show signs of edging higher amid pent-up demand in the US and Europe. Brent crude is closing in on the $70 a barrel level as the market continues to brush off the worsening COVID-19 situation in Asia. A rebound in economic activity in the US   is expected to prop up downstream oil demand, which should offer support to further price increases.

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