Tuesday 20 August 2019

Irish M&A tally falls in wake of $62bn Shire deal

M&A deals slipped 6pc to €18.4bn in first half of 2019 when tie-up with Takeda was stripped from figures

Tally: Table shows a drop in M&A deals in first half of the year
Tally: Table shows a drop in M&A deals in first half of the year
John Mulligan

John Mulligan

The value of mergers and acquisitions (M&A) involving Irish entities plunged 75pc to €18.4bn in the first half of 2019.

But the huge slide was the result of a single deal announced in the first half of last year, as Takeda moved to buy Ireland-headquartered pharma group Shire for $62bn (€55bn).

The massive swing highlights the outsized impact of big, largely US, corporate transactions on the Irish data.

Excluding that deal, the first-half tally for 2019 was down 6pc. There were a total of 204 M&A deals involving Irish entities in the first six months of this year, compared with 260 in the corresponding period of last year.

Global uncertainty fuelled by Brexit and the continuing US-China trade battle has generally weighed on M&A activity. So too has weak sterling and concerns about wider global economic growth.

The Refinitiv data shows that in the first half of 2019, Arthur Cox was the top legal adviser to deals with an Irish link, acting on 19, followed by A&L Goodbody with 12 and William Fry's 11 mandates. Deloitte was the busiest financial adviser, acting on eight Irish deals.

Deals announced in the first half of the year that involved Irish entities included the recently announced plan by Bank of Ireland to sell its UK credit card business for €591m. This includes Post Office and AA credit cards issued by the bank, as well as its own branded cards. Also included in the tally compiled by Refinitiv for the 'Irish Independent' is the €300m-plus sale by CRH of its European shutters and awnings business to Stella Group.

The €90m acquisition by Smurfit Kappa of the 30pc of Carton de Colombia that it did not previously own is also included. So too is the £209m (€233m) acquisition announced in May of Irish financial services firm IFG by UK private equity group Epiris.

The failed €700m bid by Cavan-based Kingspan for some or all of Belgian firm Recticel is included in the deal table, although in May Kingspan CEO Gene Murtagh said that the offer was unlikely to be revived.

The start of the year has also seen an agreed €145m sale of 'Irish Independent' publisher INM to Belgian-Dutch group Mediahuis.

That sale was approved by INM shareholders last week.

Irish M&A figures can be skewed by deals involving large firms that may have a corporate headquarters here for tax purposes, but not an operational headquarters.

A recent example includes a €186m acquisition of Turkey's Ulusoy Elektrik by US power management company Eaton.

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