Number of deals down on last year as market remains ‘tentative’

THE number of mergers and acquisitions during the first six months of 2011 fell by 15 per cent, research showed yesterday.

Experian’s latest mergers and acquisitions and equity capital market data also revealed that the value of deals during the first half increased by seven per cent, when compared with the first half of 2010.

Altogether, there were 2,316 deals in the first half of 2010 and 1,978 deals in the same period this year.

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Wendy Smith, business development manager at Experian Corpfin, the global information services company, said: “The first half of 2011 shows that there is still a degree of tentativeness in the market. This is further impacted by the fact that there are fewer business insolvencies to create opportunities and liquidity in the market and, to some extent, the fact that vendors still have high expectations on price.

“The North West and Wales are the only areas that appear to be bucking the trend at the moment, with both seeing slight increases in the volume of deals.

“Looking across Europe and the rest of the world, around a third of the companies involved in deals are based outside the UK, so it is very much a global market place. It is not surprising that the low activity can be seen across the board.

“Nonetheless, we are in a more optimistic place than we were in a year ago and, as increasing numbers of businesses begin to focus once again on strategic growth rather than cost-cutting, we would anticipate a small rise in deal volumes in the coming year.”

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In the first half, Rothschild was the best performing financial adviser by volume with 46 deals, while Citigroup was the highest by value, with deals worth a total of £23.3bn.

Law firm DLA Piper advised on the highest number of transactions while the leading legal adviser by value was Linklaters.

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