Trends in European Public M&A
Europe saw a major increase in public M&A activity in 2021, fueled by cheap money and optimism as economies started to emerge from the worst effects of the pandemic. In particular, PE purchasers with dry powder to deploy and U.S. corporates were attracted by relatively low valuations. Q2 and Q3 saw several competitive situations. In several cases, target shareholders successfully persuaded purchasers to raise their original announced offer prices to levels that they felt reflected the target's real value. A reduction in activity followed in late Q3, perhaps because valuations had increased as a result of the flurry of activity earlier in the year. There were some high-profile instances of ESG-driven activism, with certain campaigns agitating for M&A. SPAC transactions were popular in certain parts of continental Europe, although the initial hype surrounding SPAC IPOs abated in Q3 and some high-profile IPOs were postponed. The vast majority of announced SPAC acquisitions were de-SPACs of U.S.-headquartered SPACs.
As noted in the FDI article, increased regulatory intervention continued to be a feature, with many European jurisdictions introducing new foreign direct investment screening regimes, expanding the scope of existing ones, and, in France's case, extending the life of restrictions that had hitherto been temporary. In addition, following Brexit, the United Kingdom's Competition and Markets Authority will be more active in global deals, and parallel EU and UK merger control regimes (rather than the previous one-stop shop) will apply. Amendments to the United Kingdom's Takeover Code came into effect in July to, among other things, abolish the old distinction whereby UK/EU competition clearance conditions were not subject to the same high threshold for invocation as other competition and regulatory clearance conditions (such as HSR).
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