M&A hits €14.9bn after Brexit-vote dip

INTERNATIONAL investors surged into Ireland in record volumes last year, pushing up merger and acquisitions activity to €14.9bn in 2017 with the unprecedented wave of dealmaking forecast to extend into this year as the economy heads into its fifth year of recovery.

Conditions are captured in William Fry’s latest annual M&A report, published just as packaging giant Smurfit Kappa rebuffed a takeover approach from US rival International Paper.

Yet while 2018 has started with a bang, the survey shows the number of blockbuster transactions shrank last year, with just three deals exceeding €500m in value. Shell’s sale of its 45pc in the Corrib natural gas field to Canada’s Pension Plan Investment Board for €830m last summer topped the leader board.

Shane O’Donnell, partner and head of corporate/M&A at William Fry, pointed out the higher volume of mega-deals in 2016 resulted primarily from ‘tax inversion deals’, as companies sought an Irish address to lower their corporate tax bills.

The law firm’s survey also shows private equity returning to M&A in 2017 after the US presidential election and the Brexit vote disrupted transactions in the second half of 2016.

A total of 37 deals worth a combined €12.2bn were struck by buyout firms last year, more than double the amount chalked up in 2016.

Financial services, pharmaceuticals, consumer goods and technology are the sectors most likely to see M&A volumes this year, said Mr O’Donnell.

But he warned macro economic risks represented the greatest threat to dealmaking, including withdrawal of quantitative easing, tax changes in the US and the spectre of a global tariff war, as key concerns.