Irish M&A tumbles as US gets tough on controversial deals
The value of Irish M&A has plunged 86pc since the start of this year, with deals worth €4.1bn announced in the year to date compared to almost €29bn in the same period last year.
The number of deals has held up better, falling just 12pc to 97 versus 110 a year ago, according to data prepared by Thomson Reuters and commissioned by the Irish Independent.
The fallout from Brexit may have caused some potential deals to be put on hold, but the big change is tighter US rules introduced last year and even tougher talk from US President Donald Trump which led to a collapse in so-called tax inversion deals.
Recent years have seen a slew of large American multinationals nominally relocate to Ireland by buying smaller rivals with a tax domicile here.
The controversial deals cut the US giants' tax bills, and distorted Irish merger and acquisition statistics by adding multi-billions of euro to the figures, without generating substantial real economy benefits to Ireland.
The latest data suggests tighter rules introduced by then-president Barack Obama last year combined with corporate fear of being caught on the wrong side of Mr Trump's vow to keep US jobs and companies at home has killed the trend, at least for now.
The same data shows that law firm Eversheds Sutherland is Ireland's lead M&A adviser so far this year.
The firm's focus on domestic and European cross-border deals means it was not affected by the fall-off in large US inversions, Alan Murphy, managing partner at Eversheds Sutherland in Ireland, said.
The move to the top of the rankings also reflected a build-up in the firm's corporate advisory arm, said Mr Murphy, who is also chairman of Eversheds International.
"We now have seven partners in corporate finance, each with broad M&A expertise as well as sectoral focus in areas like life sciences, healthcare and pharmaceuticals, and that's supported by strong tax and intellectual property teams," he said.
Among the recent Irish transactions where Eversheds Sutherland advised were Galway-based Lifes2Good's sale of Viviscal to the Nasdaq-listed Church and Dwight for a reported €150m and the acquisition of the ClearCircle specialist environmental business from One51plc.
The firm also advised on a number of deals that crossed more than one jurisdiction, such as the acquisition of a healthcare institution in Denmark for Virtus Health, the Australian-listed fertility company that has a European headquarters in Ireland as a result of the 2014 acquisition of the Sims Clinic.
Eversheds Sutherland is headquartered in London.
"The differentiator for us is our strong European presence, clients like that when they are doing deals that might involve three jurisdictions," Mr Murphy said.
"We're seeing a strong pipeline for the firm in M&A activity for the remainder of the year.
"The extent of the global Eversheds Sutherland network, which brings the unique ability to manage M&A activity across multiple borders, is proving to be very attractive to clients."
The data from Thomson Reuters shows A&L Goodbody advised on the same number of deals as Eversheds Sutherland, but with a lower overall valuation.
Little-known German private bank MM Warburg-Brinckman Wirtz and biggest German neighbour Deutsche Bank were the busiest financial advisers, according to the data, with two deals each so far this year valued at €95m.
The last large-scale inversion involving Ireland was a year ago when US car battery-maker Johnson Controls bought Tyco International for $16.5bn (€15.4bn) and so lowered their combined tax bill.