Mergers and acquisitions will get a fillip from consolidation in hard-hit industries in spite of the financial downturn, as the strong eat the weak.
M&A business has slumped in the past year but companies with strong balance sheets are out bargain-hunting.
Business leaders meeting in Davos this week said they saw opportunities in the global downturn, though leverage is out and a hard-nosed focus on cost cutting is the order of the day.
"We're going to see further waves of consolidation as weaker players are taken over by stronger players," said Mark Foster, global head of management consulting at Accenture.
"The retail industry is going to go through a big consolidation phase, as will the consumer goods, pharmaceuticals and communications industries."
With economies around the globe tipping into recession and credit markets gummed up, the volume of mergers worldwide dropped 30 percent last year, according to data from Thomson Reuters.
That decline isn't going to reverse any time soon but Pfizer Inc.'s $68 billion deal to buy Wyeth, announced on Monday, shows big deals - especially where they offer big cost reductions - can still be done.
In the same sector, Roche Holding AG yesterday launched a hostile bid for the 44 per cent of Genentech Inc it does nott already own, at a lower price than one offered in July.
These moves are likely to spark more M&A in health care, where cash flows remain strong despite deep-seated structural problems due to a "cliff" of patent expiries.
Other potential predators, however, will not fare so well.
Dow Chemical Co. CEO Andrew Liveris - a Davos veteran - was notable for his absence in the Swiss ski resort this week, after failing to close his firm's planned acquisition of rival Rohm and Haas Co. by a deadline of January 27.
Bankers and executives say the recession presents openings for cash-rich suitors in a number of industries.
"The big sector, obviously, in terms of restructuring, is financial services," said Blackstone Group senior managing director John Studzinski.
"There is also an enormous amount of work in energy and infrastructure ... I think that trend will continue."
Duke Energy CEO Jim Rogers is among those watching closely for the chance to buy attractively priced assets.
"The opportunities will only increase over time and we're always looking for opportunities to strengthen our position," he said.
Elsewhere, software maker Adobe Systems Inc. said it would be "aggressive" with small acquisitions this year, medical devices maker Medtronic Inc. plans a series of bolt-on purchases and electronics retailer Best Buy Co. is eyeing bankrupt store locations.