M&A activity in Europe drops

MergerThe Asia Pacific region has overtaken Europe as the second most active region after America when it comes to mergers and acquisitions (M&A), with 141 deals over $100 million (€72.6 million).

North America leads the field in terms of activity, according to research by Towers Watson, with 375 deals so far this year, accounting for nearly 60% of the global total.

With 106 deals, the number of M&A deals in Europe has fallen to the lowest level since 2009.

“Two years ago we were talking about the Asia-Pacific region starting to match Europe on M&A deal volumes, but now it has overtaken Europe by some margin,” says Steve Allan, M&A practice leader for Europe, the Middle East and Africa at the consultancy.

“This is not because Asian companies are doing significantly more deals than before but seemingly because European acquirers have been holding back with a notable drop off in the fourth quarter of 2013.”

Allan adds that activity could pick up next year as political and economic uncertainty is starting to diminish.

Globally, there have been fewer so-called “mega-deals” that are worth over $10 billion. Another trend identified by Towers Watson is that deals that took over 70 days from announcement to completion performed better than quick deals.

Globally, acquirers have also enjoyed the best performance since the financial crisis, outperforming companies not involved in mergers and acquisitions by an average of 4.7 percentage points.

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