hurricanemaxi
Joined: 17 Sep 2011
Posts: 83
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 Posted: Tue Sep 27, 2011 4:21 am Post subject: Global Takeover Rebound Falters on European Woes |
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The global rebound in mergers and acquisitions stumbled in the third quarter as takeovers by U.S. and Asian acquirers failed to compensate for a 43 percent decline in purchases by European companies.
Dealmaking dropped 22 percent to $504 billion from the prior three-month period, according to data compiled by Bloomberg, as European suitors retreated. St. Louis-based Express Scripts Inc.’s $29.1 billion bid for Medco Health Solutions Inc. and Tokyo-based Nippon Steel Corp.’s $9.5 billion offer for Sumitomo Metal Industries Ltd. blunted the drop.
U.S. and Asian companies are putting stockpiles of cash to work as a dimming economic outlook makes it more difficult for them to expand on their own. While their counterparts in Europe are also seeking growth, the deepening debt crisis there discouraged some from pursuing deals.
“The broader economic climate in Europe is bringing uncertainty to decision-making,” said Hernan Cristerna, head of M&A for Europe, the Middle East and Africa at JPMorgan Chase & Co. (JPM), the top adviser on deals this year. “New mandates have been coming through, but we are realistic that it might be difficult to execute some of them in the current environment.”
The rout in Europe imperils what is on track to be the second year of a global recovery in dealmaking. Companies have struck $1.78 trillion of deals this year, 18 percent more than the $1.51 trillion they put together at the same point in 2010.
U.S. Versus Europe
For every $2 U.S. companies spent on acquisitions in the third quarter, European ones spent less than $1. For most of the past decade, U.S. and Europe disbursed about the same amount.
U.S. deals included two big bets by technology giants: Google Inc.’s $12.5 billion offer for Motorola Mobility Holdings Inc. and Hewlett-Packard Co.’s proposed $10.3 billion acquisition of U.K. software maker Autonomy Corp. Melbourne’s BHP Billiton Ltd. bought Houston-based Petrohawk Energy Corp. for about $12 billion, its largest acquisition.
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