Ireland now 'ripe' for an increase in takeover activity
Country missing out on European surge
IRELAND is missing out on a Europe-wide surge in corporate deal making, according to research by Thomson Reuters, even though corporate financiers think the market here is ripe for a pick-up in activity.
Across Europe, takeover activity shot up 65pc in the first quarter, led by deals like Deutsche Boerse's US$10bn acquisition of its New York-based rival NYSE and AT&T's US$39bn acquisition of Deutsche Telekom's T-Mobile USA.
In Ireland, the pace is far less intense but corporate advisers say the European surge will translate into deals here as cash-rich corporations extend their hunt for new assets.
The research compiled for the Irish Independent shows that the volume of Irish takeover deals fell over the first quarter of 2011 to €810m, down from €3.3bn in the same period a year ago.
So far this year 48 takeover deals have been announced, compared to 57 by the end of March 2010.
The research shows that Dublin-based A&L Goodbody remains the top Mergers & Acquisitions adviser among Irish law firms.
A&L Goodbody advised clients on three corporate deals worth €260m in the first quarter of the year.
There is little to celebrate in topping the table however. At the same stage last year the firms had been instructed on deals worth more than €1bn.
In 2011, the next best-ranked Irish law firm is McCann Fitzgerald with two deals. William Fry and Matheson Ormsby Prentice advised on a deal each, according to the data compiled by Thomson Reuters.
International firms have muscled into the Irish market, however, grabbing six of the top 10 spots in a league table of advisers, a trend that reflects the importance of cross-border deal making.
While the decline in transactions is bad news for firms that make their money advising on transactions, the drop in activity highlights the end of what was a fire sale of banking assets.
In contrast, the majority of deals announced so far this year were true corporate actions. These deals include transactions that are putting fresh capital into circulation in Ireland, like the takeover of Norkom Technologies by BAE and an investment by France's state-owned investment fund for a 14pc stake in OpenHydro, a Dublin-based manufacturer of turbines.
Google's €100m acquisition of the Montevetro Building in Dublin is perhaps the most hopeful deal of the year so far. It's a double vote of confidence in Ireland's workforce and the long-term prospects of the commercial real estate market.
Irish companies are also doing deals, and the data shows that these domestic buyers are focusing their firepower abroad.
Even with credit tight well-resourced Irish companies like DCC and Glanbia have been able to execute multi-million euro takeovers, typically using the deals to diversify their positions into less economically battered markets.