Monday 20 January 2020

Uncertainty and weak growth hit European M&A bids

Takeover: AbbVie’s €77bn takeover of Allergan is due to complete this year
Takeover: AbbVie’s €77bn takeover of Allergan is due to complete this year
John Mulligan

John Mulligan

THE value of merger and acquisitions (M&A) activity in Europe last year slumped almost 22pc to $770.5bn (€688bn), as sluggish growth and Brexit weighed on the region, according to Mergermarket.

Ireland still featured in one of the world's biggest M&A deals of 2019, as Abbvie made a $86.3bn bid for Ireland-headquartered Botox maker Allergan.

That was the third biggest M&A deal of 2019 and the biggest transaction in Europe.

Among bids that failed to come off last year was Kerry's offer to buy DuPont's global nutrition business, when it lost out to International Flavors and Fragrances' rival $26.2bn offer.

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The biggest deal of 2019 was the $88.9bn merger of US defence giants United Technologies and Raytheon.

Second was the $87.8bn acquisition by Bristol Myers-Squibb of Celgene.

The global value of M&A deals in 2019 was $3.3trn, according to Mergermarket, 6.9pc lower than in 2018.

At $389m, the average size of deals was higher than in 2018.

There were 38 deals last year each with a value of more than $10bn - the highest number of such transactions since 2015.

Mergermarket said that with swelling cash reserves and attractive debt finance terms, firms have continued to hunt for takeover targets. But it noted that the scarcity of family-owned assets has triggered a boom in take-private deals.

There were 78 of those recorded last year by Mergermarket, worth $158.3bn. That was the highest volume and value of such deals since 2007.

"On the back of the longest equity bull market in history, and amid persistently low interest rates, corporates and private equity firms alike have ample cash reserves and appealing debt financing options at their disposal," said Beranger Guille, global editorial analytics director at Mergermarket.

Irish Independent

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