Sunday 18 August 2019

M&A activity drops 20pc amid economic concerns

Blockbuster: AbbVie’s takeover of Allergan has been one of the major deals of 2019. Photo: Bloomberg
Blockbuster: AbbVie’s takeover of Allergan has been one of the major deals of 2019. Photo: Bloomberg
Ellie Donnelly

Ellie Donnelly

The number of mergers and acquisitions taking place in Ireland fell 20pc in the first half of this year, as economic uncertainly continues.

A total of 75 deals were announced during the period, down from 93 in the corresponding time last year, according to the latest 'Mergers and Acquisitions Review' from law firm William Fry.

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The fall in activity came on the back of weaker sentiment due to global economic uncertainty, as well as Brexit unease, with the UK initially due to leave the European Union in March.

Shane O'Donnell, corporate and M&A partner at William Fry, said: "The impact of this geopolitical uncertainty was observed in quarter-four 2018, and with dealmakers no clearer on how these matters will conclude, the slowdown has carried over to quarter-one 2019, but we have seen a marked improvement in quarter-two."

While the Irish market has offered "compelling value" and opportunities for investors, Mr O'Donnell said dealmakers are likely to adopt a more cautious approach until a clearer picture emerges of Ireland's economic future.

Despite the fall in the number of mergers and acquisitions this year, the value of deals has increased by 24pc, according to the report.

Among the major transactions that have taken place so far in 2019 was the acquisition of Botox maker Allergan by US-headquartered drug company AbbVie in an $86bn (€77bn) blockbuster deal.

Also of note was the recently finalised acquisition of Ireland's largest newspaper group, Independent News & Media (INM), by the Belgian-headquartered publishing company Mediahuis, in a deal valuing INM at €145.6m.

Additionally, Green REIT this week finalised its decision to sell to Henderson Park for €1.34bn, all of which shows the ongoing international interest in Irish assets.

Private equity firms were among the major contributors to deal activity in the first half of this year.

The value of such transactions in Ireland totalled €1.8bn over the first six months of 2019, a 74pc rise compared with the same period last year.

While private equity deal value is still "well below" recent years, according to the report, they are responsible for around three quarters of the overall deal value in Ireland so far this year.

Meanwhile, firms operating in the technology, media and telecoms industries accounted for just over half of all deals in terms of value, and one in five transactions in terms of volume.

Irish Independent

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