After years of holding back as Europe lurched from crisis to
crisis, the region’s companies are leading a global dealmaking comeback.
Western European buyers announced $149 billion of acquisitions in the first
three months of the year, a gain of almost 60 percent over the same period in
2013 and the biggest jump worldwide, according to data compiled by Bloomberg. Interest rate cuts and central bank
pledges to buy the bonds of crisis-hit countries have boosted business
confidence in Europe, and the euro area economy grew more than economists
expected in the fourth quarter of 2013. Worldwide, the value of announced
acquisitions rose about 26 percent, to $637 billion in the first quarter, the
best start to a year since 2007. Technology and communications companies
announced $174 billion of takeovers globally, the data show. Chief executive
officers are “more optimistic that they can operate within the context of an
improving economy,” says Hernan Cristerna, global co-head of mergers and
acquisitions at JPMorgan Chase in London. But, as last year showed, a strong
start in M&A can fizzle. After takeovers of Dell and H.J. Heinz in the
first two months of 2013, activity during the rest of the year was lackluster.
“Conditions for dealmaking have been quite good for the last couple of years,
but the mindset has been cautious because of whatever the looming crisis of the
day was,” says Gregg Lemkau, global co-head of M&A at Goldman Sachs.
M&A are very beneficial to investment bankers and lawyers too as these deals are very lucrative and the investment bankers and lawyers get paid huge fees.
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You will probably see more deals moving forward. Debt is cheap and the economy is improving, both signs of improved M&A activity.
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