M&A activity in Europe is predicted to increase 14.4 per cent, and 13.3 per cent throughout the whole of EMEA, over the next six months compared to the same period last year, according to data from Intralinks.
These rises mean EMEA is the top performing global region for expected merger and acquisition (M&A) activity in the next six months, with the manufacturing/industrials, technology and consumer sectors dominating deal pipelines in Europe.
Intralinks reveals these findings as part of its latest Intralinks Deal Flow Predictor (DFP). The Intralinks DFP accurately forecasts the volume of future M&A announcements by tracking M&A deals that are in the preparation stage or have reached due diligence. On average, these deals are six months away from their public announcement. The Intralinks DFP has been independently verified as a reliable predictor of future M&A activity.
Although the overall outlook for EMEA is positive, increases in early-stage M&A activity in the UK – currently sitting at a 10 per cent increase in volume on the same period last year – are more subdued compared to France, Germany and Spain. Uncertainty surrounding the outcome of the UK general election on May 7 is likely having an impact on UK dealmakers, who may be taking a more cautious approach to M&A until the future political direction of the country is decided.
European M&A volumes will be boosted by a bullish deal environment in Germany, with early-stage M&A deal activity rising 26 per cent compared to the same period last year. Germany is a significant driver of overall M&A activity in Europe, and it is likely that the EUR 60 billion per month quantitative easing (QE) programme recently started by the European Central Bank will have a positive impact on future dealmaking. According to 120 EMEA dealmakers surveyed by Intralinks in separate research, 67 per cent of respondents expect an increase in European deals as a result of QE.
Philip Whitchelo, Vice President of Strategy & Product Marketing, says: “2014 was a year of recovery in global M&A markets, and 2015 has started very strongly. We expect the first half of 2015 to show a mid-single digit increase in the volume of deal announcements compared to last year. Dealmaking looks set to remain especially robust in the US and EMEA.”
Alongside the DFP, Intralinks also revealed the findings from its Global Sentiment Survey that gauges opinion among 600 dealmakers on the future deal environment. Some of the key findings are:
European dealmakers think the most attractive acquisition targets are ‘Internet of things’ (33 per cent) companies, whereas the global figures state that online businesses, mobile payments and analytics firms are more attractive (25 per cent). Global dealmakers do not think Bitcoin/online currencies companies are attractive acquisition targets, with only 3 per cent stating that this is the case.
European dealmakers are becoming increasingly optimistic that more deals will take place this year, with 76 per cent stating that they expect deal volumes to increase, compared to 69 per cent last quarter.
52 per cent of European dealmakers expect the volume of outbound M&A activity from China to increase over the next 12 months – a much higher number than North American dealmakers, of which 31 per cent believe that outbound activity to China will increase.
