M&A deals are getting bigger and better as a set of data shows their value is rising even as their numbers are falling.
According to research from law firm CMS, the value of deals in the first half of 2015 was at its highest level since 2007 – up 17 per cent – from 14 per cent fewer deals compared with last year.
CMS interviewed 230 M&A leaders across Europe and found that despite the surge in activity, sector experts remained cautious in their outlook for European markets.
Two-thirds of respondents said that if Britain were to leave the EU, it would negatively impact British M&A, maintaining the UK would seem “isolated” and “chaotic”. But 70 per cent believed that a Brexit remained somewhat or very unlikely.
Martin Mendelssohn, partner in CMS’ UK corporate group, said: “The possibility of a ‘Brexit’ is having an impact on buyer confidence and will certainly be an issue to monitor.”
For now, the UK and Ireland remains Europe’s largest market for deals, accounting for 23 per cent of European M&A volume, and 35 per cent of deal value.
M&A figures were boosted by mega-deals such as Royal Dutch Shell’s €74.5bn (£55bn) acquisition of the UK’s BG Group, which made up for the decline in the number of deals from 3,300 in the first half of 2014, to 2,800 for the same period in 2015.
Fewer, bigger deals are another sign of returning market confidence, as companies look to grow rather than consolidate and cost-save.
Private equity markets are also booming here, with €35.5bn, returned to companies after realisation, double the figure in for the first half of 2014.
There was also an 11 per cent increase in buyout value to €52.3bn, again while the number of buyouts decreased by 16 per cent to 468.