January 27, 2020

Cross-Border: Glass Half Full for U.S – Western Europe Deals

According to this White & Case “M&A Explorer” article, the dollar value of deal traffic between the U.S. & Western Europe rose by 12% to $312.9 billion through the first 9 months of 2019. The news isn’t all good though, because the number of deals fell by 13%.  However, to keep things in perspective, the article says that the overall value of global M&A during the period declined by 14% & deal volume dropped by 15%.  So, when it comes to trans-Atlantic deals, the glass is decidedly half full.

The article says that dealmaking by PE funds played a big part in the relative health of the U.S. – Western Europe deal market:

Once again, PE deals helped ensure healthy total numbers in the transatlantic deal corridor. Six out of the top ten deals in the first nine months of this year involving US-based bidders and targets in Western Europe were PE buyouts.

While only one deal in the top ten this year involving bidders based in Western Europe and US-based targets was a PE buyout, the largest deal of the year was a PE exit: KKR’s planned sale of financial data provider Refinitiv to London Stock Exchange Group for US$27 billion.

Total PE deal activity involving US bidders and Western European targets was US$61.3 billion in the first three quarters of this year, a 33% drop on the same period last year. However, 2018 was an outlier year, with the highest annual figure on Mergermarket record for PE activity involving US-based bidders and targets in Western Europe.

Looking at PE activity going in the other direction, US$59.1 billion in PE deal value was announced in Q1-Q3 2019 involving Western Europe-based bidders and US-based targets—a 158% increase on the same period the year before.

The value of outbound U.S. deals remained relatively flat, while the value of outbound Western European deals increased by 35% over the prior comparable period & exceeded the entire dollar value of Western European outbound deals for all of 2018.

John Jenkins