Monday 18 December 2017

M&A activity fell 45pc in first half

Sarah McCabe

Sarah McCabe

Mergers and acquisitions activity fell by nearly half in the first six months of this year compared to 2012, exceeding declines seen elsewhere in Europe.

There were 90 such deals completed during the period, down 45pc compared to the first six months of last year. Small transactions dropped the most, with volumes halved.

Declines were evident across Europe, Asia and the US but were less severe. In Europe deal volume decline by 21pc, while transactions were down by 29pc in Asia.

The value of Irish deals was down as well as volume. The 90 transactions were worth €13.2bn, down 39pc compared to the previous year but still up from the previous very sluggish six month period, when just €5.7bn worth of deals were announced.

But though M&A activity receded overall, certain sectors bucked the trend. Activity in the post and telecommunications sectors jumped by three fifths. Phone company Three Ireland’s purchase of Telefonica Ireland, the Irish operation of the Spanish telecoms giant,  was the largest deal in this sector since 2006.

Activity in telecoms heated up across Europe - overall volumes were up by 12pc, while deal value increased by a massive 77pc.

Deal values jumped in the pharmaceuticals sector, where transactions were worth €8.3bn, up for just €1.6bn a year before. The sector was boosted by US drug manufacturer Actavis’ acquisition of Dublin-based Warner Chilcott in May, the largest pharmaceutical deal in the whole of Europe so far this year and the largest ever deal in this sector involving an Irish firm.

 “Although M&A volumes in the Republic of Ireland overall have decreased some sectors are further along the road to recovery than others” said Wendy Driver, business development manager at M&A experts Experian. “For example, the strong activity in Ireland’s buoyant telecoms and pharmaceuticals sectors - which dominated the Irish picture in H1 2013 - looks set to continue as we move into the second half of the year.”

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