M&A: Retail therapy
US corporate buyers are finding rich pickings in Europe.
US tourists coming to Europe to go shopping over the summer is a tradition as established as European tourists flocking to New York for bargain-hunting weekends. This year, however, some US visitors have been looking for bargains in Europe that they aren’t planning to ship home.
According to Standard & Poor’s, 620 M&A deals have been announced in the past 12 months that involve a US acquirer and European target. Total cash and short-term holdings among non-financial S&P 500 firms have risen by 42.6% over the past two years, which translates to a war chest of well over $1 trillion.
It is not surprising that many of them have therefore been looking internationally to put this money to work. Deals have ranged from Kraft’s buyout of Cadbury to Global Infrastructure Partners’ acquisition of Gatwick Airport to State Street’s purchase of Intesa Sanpaolo’s securities servicing unit.
But a closer look at the figures reveals that the recent volatility within the eurozone might be giving some buyers cold feet.
S&P revealed that of the $87 billion of deals announced over the past 12 months, just $21.3 billion has been in 2010. This was, however, before Newscorp’s announcement that it intended to buy the remaining stake in British Sky Broadcasting – a deal that if it goes through will be worth $14.5