M&A: companies indulge in $237.3bn of summer lovin'

This year was the best July for global mergers and acquisitions since before the Lehman meltdown, research by Thomson Reuters suggests.

by Emma Haslett
Last Updated: 23 Aug 2013
If the positive economic data published over the past few weeks (plus the month-long heatwave) wasn’t enough to prove things are looking up, there’s more good news from the City in the form of figures by Thomson Reuters, which show last month was the best July for mergers and acquisitions since 2008.

According to the research, global M&A deals rose to $237.3bn (£155.3bn) in July this year, the highest level since the July before the collapse of Lehman Brothers, when $352.7bn of deals were recorded.

As usual, British companies were under the spotlight: deals where UK firms were targets of takeovers hit $10.7bn, the highest since November 2012’s figure of $17.9bn – although that figure was pushed up by the £3.4bn purchase of software company Invensys by French firm Schneider Electric.

There were a few spanners in the works: one being the eurozone crisis, which has dampened investors’ enthusiasm, and another being the impact of the budget ‘sequestration’ (ie spending cuts) in the US economy. There was also uncertainty over whether the US – or, indeed, anyone else – will continue their quantitative easing programmes (although for the time being, things are looking reasonably positive on that front in both the US and UK).

But although the value of mergers and acquisitions increased, the number of cross-border deals taking place slowed down. Volumes in the first seven months of 2013 are now down by almost a third from 2012, making this the slowest year for international transactions since 2009.  

So whether July’s high volume is a blip, or whether it’s evidence of higher confidence among investors, is difficult to tell. What’s more certain is that although the M&A markets are taking baby steps towards recovery, investors aren’t quite ready to take risks abroad. Quelle domage.

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