M&A in Europe crashes to hit a ten-year low

Marion Dakers
EUROPEAN merger and acquisition activity crashed to a 10-year low in the third quarter of the year, as dealmaking across the world fell to its slowest level since the depths of the financial crisis, figures out today show.

M&A in Europe has totalled $84.2bn (£52bn) so far in the three months to the end of September, less than half the amount seen a year ago and the slowest quarter for the continent since 2002.

Globally, the value of deals slumped 18.3 per cent year-on-year in the quarter to $445bn.

Only two sectors, retail and consumer staples, have managed to improve on last year’s deal level in the year to date.

Private equity groups have also shown some reluctance to buy, with activity down 10 per cent on a year ago to $181bn in the year to date, though the second and third quarters saw some improvement. The US accounts for more than half the deals by value.

The States also propped up cross-border deal activity, which fell just two per cent on a year ago and made up 42 per cent of all M&A in the first nine months of the year. More than a fifth of this activity was initiated by American firms.

Emerging markets are nevertheless feeling the effects of the slowdown, with deals by volume down 19 per cent to $208bn in the year to date.

The ongoing drought means the adviser league tables are little changed on a year ago. Goldman Sachs keeps its top spot with 284 deals, followed by Morgan Stanley and JP Morgan in second and third places respectively.

Credit Suisse remains in fourth place globally, while Deutsche has leapt from eight to fifth spot, replacing Bank of America Merrill Lynch.

Goldman has overtaken JP Morgan to take the adviser crown in the United States, and kept the number one spot in Europe to complete its clean sweep.

The biggest deals in the year to date include Walgreen’s $21.4bn purchase of Alliance Boots, Chinese group CNOOC’s acquisition of Nexen and the renationalisation of Japanese nuclear operation Tepco.

Glencore and Xstrata’s $45.5bn merger remains on course to be the biggest deal of the year.