Investment in Irish companies surges ahead of last year

Almost 100 deals involving Irish targets were completed or announced in first six months

Global M&A activity hit an all-time high in the first six months of 2021, according to EY. File photograph: Getty

Global M&A activity hit an all-time high in the first six months of 2021, according to EY. File photograph: Getty

 

Investment in Irish companies during the first half of 2021 surged compared to last year, according to a report by EY.

The report shows that 92 deals involving Irish targets were completed or announced during the first half of this year. The value of the deals closed during the period was €17.5 billion with a further €33.5 billion announced and in the pipeline for completion.

In volume and value terms, the pick-up in mergers and acquisitions (M&A) involving Irish companies has been dramatic. Just under 80 deals were completed in the whole of 2020 for a total value of €11.5 billion.

EY Ireland mergers and acquisitions partner Grit Young said there was “a strong focus” on the technology, pharma, care homes and real estate sectors.

“We also saw some large financial services transactions of loan portfolios during the period,” she said.

“Given Ireland’s strengths in tech and pharma, the focus on those sectors was actually less pronounced than what we observed in the global markets.”

Global M&A activity hit an all-time high in the first six months of 2021, with deals worth more than $2.6 trillion struck, which was up from $926 billion year-on-year and surging past the pre-pandemic five-year average of $1.6 trillion, according to EY.

Ireland also featured among the top countries for outbound M&A activity. The US topped the list having recorded $221 billion in deals, up from $77 billion, and more than double the average seen in the pre-pandemic five-year average ($92 billion).

Recording $58 billion (up from $14 billion), Canada came in second, while the Netherlands and Ireland emerged as outbound front-runners with $53 billion from an average of $21 billion between 2015-2019, and $51 billion from an average of $4.3 billion respectively.

Ms Young said the more than tenfold increase for Ireland was “mainly due to companies in the pharma sector, headquartered in Ireland and listed on the Nasdaq, being very acquisitive”.

“We saw some particularly large transactions during this time period,” she said.

“There were 13 transactions of over €1 billion with several of those over €2 billion each and others still over €4 billion each, which accounts for the major increase.”

Europe follows suit

More than half of the global activity was recorded in north America, which saw deals worth $1.4 trillion (up from $345 billion) – almost double the average seen in the five years prior to the pandemic ($784 billion).

North America was followed by the Asia-Pacific region, which saw M&A values of $446 billion, a year-on-year jump from $222 billion and an increase from an average of $317 billion in the five years pre-pandemic.

Europe followed, recording $412 billion, which was up from $245 billion in the first half of 2020, and exceeded the pre-pandemic five-year average of $356 billion.

Despite a fall in the total number of deals announced, a spike in billion-dollar deals was the key driver behind activity so far this year according to the analysis, with 479 such deals announced.

“Despite many parts of the world economy still operating under restrictions, cross-border transactions have also staged an impressive comeback, increasing to $688 billion from $236 billion in the first half of 2020,” the EY report said.

While technology-related transactions led the way with an increase in value of more than 161 per cent to $783 billion compared with the pre-pandemic average, the media and entertainment sector saw some of the largest deals in 2021.