Trans-Atlantic M&A set for further decline

Trans-Atlantic M&A, a phenomenon that made up a significant portion of activity at the height of the last M&A boom, looks set to continue its post-millennium downward trajectory. Despite a couple of sizeable US life sciences takeovers by European companies in recent weeks, trans-Atlantic deal-making has been in a state of marked decline in the years since 2000. European corporates have largely shunned US assets and overall levels have been largely maintained by the appetite of US companies and private equity investors for European assets. However the latest figures published by mergermarket reveal that trans-Atlantic activity in terms of European companies acquiring North American targets has continued to plunge in recent quarters. Compared to Q4 last year deal flow has slumped just over 50 percent by value and 32 percent by volume to 36 deals worth a total of EUR 9billion in Q1 this year. Since the peak in activity in the year 2000 the value and volume of deals has dropped 85 percent by value and 47 percent by volume to 194 deals worth almost EUR 53billion in 2004.