A new study concerning M&A activity in the first half of 2018 by William Fry in collaboration with Mergermarket has shown that 76 M&A deals were undertaken with a combined value of nearly €71bn.
Contributing to the success is Japan’s Takeda Pharmaceutical’s proposed takeover of Irish headquartered Shire Pharmaceuticals for €67.1bn – the largest ever foreign takeover by a Japanese company.
While megadeals are certainly encouraging, Irish M&A has not just boosted its deal value with one-off transactions such as the proposed Takeda/Shire deal. The number of deals conducted has remained fairly stable since H1 2017’s review, with 80 transactions recorded compared to this year’s 76.
Mid-market activity (€5m-€250m) has also remained robust, accounting for 92% of deals, comparative to last year when it accounted for 93% of deals. Such deals include Nomad Foods’ acquisition of Green Isle Foods for €226m and Martello Finance Company’s €75m acquisition of Stellwagen Finance Company.
These deals demonstrate companies looking for strategic growth opportunities in Ireland. Other reasons for strong M&A in Ireland cited in the report include:
Ireland’s Strong Economic Growth
The European Commission estimated Irish economic growth at 7.3 per cent in 2017. While this is expected to moderate in 2018 to 4.4 per cent and in 2019 to 3.1 per cent, this is still well above the EU average of 1.7 per cent.
UK’s Exit from the EU
Within the financial services sector in particular, companies could be looking to acquire in Ireland as a base to service the European market.
Low Corporate Tax Rate
Ireland remains a popular choice for foreign buyers as they are attracted by the country’s low corporate tax rate of 12.5 per cent and policy stability across commercial and taxation sectors.
As the trends above are expected to be here for the long-term and with more mid-market transactions in the pipeline, it appears that H2 2018 should enjoy the same successes as the first half of the year.
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Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximising solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.