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M and A deals up in H1 and set to grow

Thursday, August 21 12:19:40

Life science and healthcare deals accounted for 92pc of disclosed merger and acquisition values in Ireland for the first half, including some of the world's largest transactions.

Nearly 18,500 M and A deals around the world worth $1.7 trillion have been announced thus far in 2014 and the Deloitte M and A Index forecasts this to approach 22,500 deals by the end of the third quarter.

The Index predicts 8,350 deals (by volume) in the third quarter of 2014, equivalent to a 9pc rise year-on-year and a 6pc increase on the second quarter of 2014.

David O'Flanagan, Partner, Corporate Finance, Deloitte Ireland, said that several high-profile withdrawn deals have skewed the public perception of the current M and A market, disguising what has been a steady uptick in global M and A deal volumes.

"The rise in deal volumes is being driven by a boom in US deal making, where despite the severe weather related setback, US companies accounted for 55pc of all disclosed deals by value in the second quarter. Europe is a key target for US companies, year to date they have spent $89 billion on European companies and are likely to spend in excess of $150 billion on European deals this year," he said.

"In the first half of 2014, global M and A deal volumes and disclosed deal values have increased year on year in every industry sector except for financial services. This is mirrored in Ireland, with one exception, where disclosed deal values have fallen in the technology, media and telecoms industry sector."

"The half year has also seen the withdrawal of a number of blockbuster deals, although in overall terms only 137 or 1pc of announced deals have been withdrawn in the period."

Life science and healthcare transactions announced accounted for 92pc of disclosed deal values in Ireland for the first half, including five of the six largest transactions. The largest of these is Medtronic's acquisition of Covidien Plc, which is currently in progress. Another major transaction in this space was announced last month - the acquisition of Shire Plc by AbbVie Inc., which is also in progress.

"The global IPO market is performing strongly, in the year to date, over 700 companies have come to market totalling 53pc of 2013 volumes, the highest recorded first half IPO volumes since 2011. Companies have raised proceeds of $103 billion which is a 20pc increase over the same period in 2013, and are taking advantage of the favourable conditions to raise equity," said Mr O'Flanagan.

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