European M&A activity for the 2Q 2019
According to Pitchbook´s 2019 2Q report, European M&A activity continued to slightly decline in 2Q 2019, in line with the trend since 2016. No significant deals were closed in the quarter, but the good news is that a selection of upcoming mega deals creates cause for optimism
The DACH region fell the most, with a 57,8% quarter on quarter drop. Central and eastern Europe M&A activity rallied somewhat, increasing 47,3% QoQ, and the UK & Ireland despite the Brexit, contributed with the highest proportion of deal value (37,7% QoQ).
A study of Baker McKenzie reveals that in the Spanish scenario, M&A activity in this period shows fewer operations than the previous one (272 vs. 295) but of a higher volume ($ 5.490 mm vs. $ 3.984 mm). The characteristic of the period is an increase in domestic operations (in value, although not in number), a phenomenon that is repeated in international operations carried out by Spanish companies over foreign ones (increase in value, although not in number), in contrast to the strong general decrease in international operations of foreign companies over Spanish ones.
There is optimism for the second half of the year, thanks to the prominence acquired by Private Equity funds, the appetite for quality assets in the market and the low cost of financial leverage.
The most active sectors in M&A operations in Spain were energy, media, entertainment industry and retail, being the most significant operation The Carlyle Group's acquisition of a 30-40% of CEPSA.
And, back to Europe, the diminishing quantity of corporate M&A deals has continued. There is also a growing intent from Japan-based companies to establish themselves in Europe. And, in this cross-border line, protectionist policies could unfortunately interfere with future inward investment from outside the EU.