European deal-flow picks up in late 2012 — mergermarket report

A lull in European dealmaking in the first nine months of 2012 was offset by a surge of M&A in the fourth quarter, with volumes up by 5.4% and value up by 88.9%, according to a report from data provider mergermarket.

Its EMEA Deal Drivers report indicated the value of deals was the highest since Q4 2010, and Europe’s uptick was in line with a global spike in deal making.

M&A activity was supported by improved confidence about the future of the Eurozone as well as greater certainty about the trajectory of the US as newly re-elected President Barack Obama averted the looming fiscal cliff.

In terms of geographies, dealmaking continues to reflect the dynamics of the Eurozone crisis, with the Nordics and relatively stable markets Central and Eastern Europe dominating deal flow alongside a more subdued Southern Europe

The report, published in association with US-based Merrill DataSite, showed most sectors registered a decline in full year M&A activity by value, with the overall figures rescued by a 31% surge in the value of energy mining and utilities deals, supported by the €34.4bn all share merger of Xstrata and Glencore.

Industrials and chemicals was another active sector during 2012, accounting for 14.1% of deals by value and 22.3% by volume.

Buyouts in the private equity sector proved relatively muted, with a total of 877 deals worth €70.7bn compared to 1,105 worth €78.6bn in 2011. Exits in 2012 were also down on the previous year, with 542 deals worth €84.9bn compared to 655 worth €93.7bn in 2011.

According to Sarah Syed, private equity correspondent at mergermarket, “Global economic uncertainly has hindered the M&A market since the Lehman crash and 2012 was no exception to this rule. On a positive ending to the year, however, deal flow picked up – a trend that dealmakers are hoping will trickle into 2013. Opportunistic M&A and consolidation looks most likely for the year ahead with some even hoping for further mega buys following the buyouts of Dell and Heinz.”

Deal Drivers EMEA provides an extensive review of M&A activity in the EMEA region, offering a detailed analysis of specific sectors – including sector-specific league tables – and identifying emerging trends for the next six month period.

Click here for the full report.

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