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Consumer Products Deals Quarterly, January-March 2011 - Geographic focus: Europe dominates volumes - EY - Global

Consumer Products Deals Quarterly, January-March 2011

Geographic focus: Europe dominates volumes

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Deals involving BRIC nations decreased by 29 to 56 deals, with the decrease in deal volume led by Russia.

Europe once again accounted for the largest proportion of cross-border deal activity in terms of volume in Q1 11, both as the buyer and seller. The US, however, accounted for two-thirds of buyer region value, largely because of DuPont's purchase of Danisco.

European and North American deals

There were 111 cross-border deals in Q1 11, a decrease of 19 deals (15%) compared with Q4 10. This decrease, however, is lower than the 30% decrease in total deal volume.

Europe's proportion of buyer region deal volume increased from 42% to 48%, although in absolute terms the number of deals decreased by 1 deal to 53.

Europe was also the dominant seller region for cross-border deals, with a 46% share, but with a decrease of 10 deals, from 61 in Q4 10 to 51 in Q1 11. We note that 33 of the 53 cross-border deals with an undisclosed value in Q1 11 involved a European buyer.

Deals involving BRIC nations decreased by 29 to 56 deals, with the decrease in deal volume led by Russia.

North America accounted for only 20% of buyer region deal volume (22 deals), but for 66% of cross-border deal value, principally due to one transaction — the US$6.3b DuPont mega-deal, with a US buyer and a Danish seller.

Regional volume comparisons, Q1 08 to Q1 11

Source: EY's analysis of FactSet Mergerstat data from Q1 08 to Q1 11.

While accounting for the largest proportion of buyer region volume, European deals only amounted to 26% of the total disclosed value.

Europe, however, features as the seller region in 7 of the quarter's top 10 deals Asia Pacific recorded the largest absolute decrease (as a seller) in total deal value in the quarter. Total value fell by US$1.6b from US$2.4b to US$800m. The sharp drop can probably in large part be attributed to the Japanese tsunami.


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