The wave of mergers and acquisitions (M&A) is beginning to improve as the financial reforms have begun to take shape in the last 10 months.

The second semester report of mergermarket.com showed that the final stretch in the year 2010 will see more M&A activities across all industries led by the viable energy sector, the life sciences & healthcare industry, business services and the financial services industry.

According to its report, "Deal Drivers: North America", the "M&A market appears to be stabilising as financial markets begin to improve and the long-anticipated regulatory reforms are put in place."

It also noted that in the energy and mining sectors, in particular, cross-border and domestic deals will be initiated and some would even be finalised in the United States, Canada, Africa, Indonesia, and Australia.

It cited that BP Plc has recently announced the sale of its four assets in line with the strategy to pay off rising financial penalties due to the oil spill.

It said that aside from renewable forms of energy, power generation entities with new coal basins in Africa and Indonesia are now very interesting pieces for acquisition in the near term.

The rising demand for steel, steel by-products, and coal because of the increasing urbanization of emerging economies China and India, have also triggered the demand for acquiring and takeovers of coal companies.

Australian companies on target

In a related briefing report of UBS to its clients, it cited that potential targets for acquisition include coal churning companies listed in the ASX/S&P200 companies Whitehaven Coal Ltd., Macarthur Coal Ltd., and Aquila Resources Ltd., Southern Cross Equities Ltd. Eary this year, Macarthur Coal ignored takeover offers from Peabody Energy Corp. and New Hope Ltd.

"There is now an increasing challenge to acquire coal manufacturing plants in Australia that are accessible by rail and by port, which are important in the on-time delivery of products," a UBS analyst said.