Western Europe stages major M&A comeback in Q2

The region secured a host of megadeals despite political volatility, with EU powerhouses leading the way

Western European firms continue to command high price tags—even against a backdrop of political uncertainty. There were 1,285 deals worth US$254.7 billion announced in Q2, a steep rise in value compared to the previous quarter. The region fared well from a global perspective, with its share in global deal value shooting up from 25.6% in Q1 to 35.6% in Q2.

A drop in volume demonstrates that dealmakers in the middle market may be struggling with political uncertainty, but those at the top end show little sign of slowing down. Q2 brought nine megadeals worth a total of US$137 billion, up from four deals worth US$48 billion in Q2 2016, and six deals worth US$97.1 billion in Q1.

The EU remains an active hub for dealmaking despite divisive regional elections and heated Brexit negotiations. Indeed, Germany attracted the highest-valued global deal of the quarter despite an impending election—US Praxair’s US$45.5 billion agreement to purchase industrial gas firm Linde.

While Germany was the most targeted country by value, it was the UK that secured the highest number of deals in Q2. Against a backdrop of a chaotic snap election and deep political divisions surrounding Brexit, the UK attracted 299 deals worth US$50.9 billion in the second quarter. The falling pound could have well spurred buyers to look for bargains. The largest deal saw Chinese sovereign wealth fund CIC agree to acquire logistics firm Logicor from Blackstone, highlighting the continued interest from Chinese firms for the right target.

Despite an unsettled political environment, prize assets will likely continue to draw international interest in the second half of the year, with the EU remaining the engine for deals.

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