SALON

Tuesday, Jun 26, 2012 11:15 PM UTC

North America fuels Q2 rise in global M&A deals

By

Topics: From the Wires,

LONDON (AP) — North American businesses led a global increase in corporate deals during the second quarter, offsetting another decline in crisis-afflicted Europe, a consultancy said Wednesday.

In its quarterly tracker of mergers and acquisitions, or M&A, Ernst & Young found that the volume of announced deals in the second quarter rose by 10 percent from the previous three-month period. That increase followed four straight quarters of decline.

North America saw a 13 percent increase in quarterly bid volumes but activity in the 17-country eurozone remained weak. There, volumes were down 17 percent as the single currency bloc was buffeted by continued market volatility and increased political instability, particularly in Greece. The level of activity in the eurozone was the lowest since Ernst & Young started monitoring M&A levels at the start of 2010.

“Ongoing market uncertainty has clearly restrained eurozone M&A activity in Q2 of 2012,” said Dave Murray, European M&A markets partner at Ernst & Young. “That said, the small upswing in average bid value and a strong pipeline of mega deals could indicate an increasing level of potential confidence.”

Notable deals announced during the quarter included Nestle’s $11.9 billion offer for children’s food maker Pfizer Nutrition and global power provider Eaton Corp.’s $11.5 billion offer for electrical equipment maker Cooper Industries.

Despite the improvement, Ernst & Young said global M&A volumes during the quarter were still at their second lowest since the first quarter of 2010, when the Greek debt crisis first flared up. And though the value of bids increased by 18 percent on a quarterly basis, the average was still 22 percent below the same period the year before.

The survey also showed that the economic uncertainty around the world has made it more difficult for firms to complete their deals.

“Fewer transactions have closed in the quarter during which they were announced,” said Murray. “Deals are taking longer and becoming increasingly difficult to complete, which increases the need for careful planning and diligence.”

Murray said monitoring the progress of deals over the coming months will be an important gauge of the state of the global economy.

“If these deals do get across the line, we can infer a return in market confidence and renewed appetite to get deals done,” he said.

More Pan Pylas.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments are not enabled for this story.

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations