M&A Activity Will Continue Despite Market Volatility: Analyst

As thethree major U.S. stock indexes continue to rally following last week's stock roller-coaster ride, mergers and acquisitions will continue despite increased volatility, one analyst told CNBC Monday.

"I think if you're a CEO and you have a strategic plan and you have an asset that you really like, last week's market volatility is a blip," said Jeffrey Solomon, Cowen Group's head of investment banking.

On Monday, Google announced it would buy phone hardware market Motorola Mobility Holdingsfor $12.5 billion to compete with smartphone rival Apple and to bolster the adoption of its Android mobile software.

Trio of Monday Morning Deals
Trio of Monday Morning Deals   

On Monday, Time Warner Cable announced a $3 billion deal with Insight Communications and Transocean announced its purchase of Aker Drilling for $1.43 billion.

In addition to technology, Solomon also thinks the health-care sector will show consolidation as large-cap pharmaceutical companies seek to round out their drug discovery pipelines.

To fund these mergers and acquisitions, companies are turning to a variety of financing options. Some are buying other companies with cash while others are initiating stock-for-stock deals. Also, many companies are still turning to the financing market.

Solomon said since many small-cap companies are valued more attractively now than in recent months, this is a buying opportunity now for larger companies.

"I think there's really an opportunity for larger companies who are consolidators to really take advantage of those prices," he said.


CNBC Data Pages:


Disclosure information was not available for Jeffrey Solomon or his company.