Q1 M&A value holds steady in Western Europe, even as volume slips

Despite economic volatility, uncertain elections and the Brexit effect, average valuations rose, year on year

Although the number of M&A deals fell in Q1, dealmakers looking at Western Europe are still willing to pay for the right target—2017 saw the second highest Q1 value for the region since 2008 (with Q1 2016 taking the top spot)

The number of M&A deals in Western Europe fell by 19% in Q1, compared with the same period last year. But value was down by only 6% year on year. With corporate coffers still full and credit cheap, this has pushed up the average valuation of targets across the region.

Contentious election campaigns across the EU’s largest countries and the uncertainty over Brexit may have supressed deal activity in the region, pushing volume down. But the pipeline of deals for Q2 looks robust, which bodes well for activity heading into the rest of the year. 

And there were a number of standout deals in Q1. To name just one, US company Johnson & Johnson agreed to buy Switzerland’s Actelion Pharmaceuticals for US$29.6 billion, the biggest deal in Western Europe in Q1 and the biggest acquisition the company has ever made. This led to the pharma sector accounting for the highest combined deal value in Q1, making up 24% of total deal value into Western Europe.

Indeed, the US was the most notable buyer in Western Europe, posting the highest Q1 deal value since 2008. However, keeping with the overall trend, US inbound volume was down.

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