Despite economic and geopolitical concerns, Europe emerges as the top cross-border destination
Higher valuations and increasing regulatory challenges prompt shift from North America to Western Europe. The most recent Barometer had North America at the epicenter of cross-border dealmaking. Now, the focus for executives targeting overseas assets has shifted to Western Europe. While growth has been stronger in the US than in the EU for many years, now this has had an impact on relative valuations. European assets look attractive by US standards. Together with tightening oversight of inbound acquisitions by the US and a window of opportunity before European authorities might enact similar stringent rules, dealmakers look set to act while the window is still open.
The UK, Germany and France appear in the top five most targeted countries. Within them, consumer products, automotive, industrials and financial services are sought-after sectors. These are industries in which European companies have particular strengths (consumer and industrials) or look likely to be entering a period of consolidation (financial services and automotive).
While regulatory challenges look set to be the main determinant of cross-border success in M&A deals getting over the line, it may prove to be a busy 2H19 in European dealmaking.