Takeover talk – eyes on iSelect

Financial Journalist
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News that Suncorp Group and Bank of Queensland held preliminary talks earlier this year to create a fifth force in Australian banking further, along with speculation this morning that Carsales.com.au will make a play for iCar, confirms the desire of large companies to get bigger through mergers or acquisitions – and the looming opportunity for investors.

The recently concluded reporting season also confirmed that top-line revenue gains are hard to find for many companies, and that cost-cutting remains the main engine of profit growth.

In this scenario, the need for mergers and acquisitions that create scale makes great sense, although Australian companies probably need to look overseas for assets, rather than buy more of them here. There’s only so far that companies can grow in a small market such as Australia.

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