Irish firms spend more than £3bn on acquisitions

More than £3 billion (€3.81 billion) worth of acquisitions were made by Irish companies at home and abroad in the first half of the year, maintaining the strong trend of recent years.

And Irish companies worth more than £1.3 billion have been bought by foreign companies in the same period, according to figures compiled by The Irish Times.

There may not have been a multibillion deal of the scale of the £2.8 billion merger between Irish Life and Irish Permanent in the first six months, and the Bank of Ireland/Alliance & Leicester might have bitten the dust amid a welter of recriminations. But big deals did take place and Allied Irish Banks alone has committed itself to spending more than £1 billion on its new banking investments in Singapore and Poland. These moves maintained the geographic diversification of the AIB business spearheaded by chief executive Mr Tom Mulcahy.

The rationalisation in the Irish financial services sector has yet to reach its full force, with the sale of ICC and the merger and flotation of TSB/ACC still to be consummated. But the first half saw Belgian group, KBC, substantially increase its presence in the Irish market. It bought out Irish Life's share of the IIB and Irish Life Homeloans joint ventures at a cost of £125 million. The merged Irish Life & Permanent also made its first acquisition when it paid around £20 million for 75 per cent of Woodchester Investment Brokers.

Anglo Irish Bank expanded its corporate business with the £30 million acquisition of Smurfit Paribas and its British loan portfolio with the purchase of Hypo Versinsbank's British lending book for almost £67 million.

The half-year featured the biggest management buyout in Irish history when BC Partners backed the £578 million buyout of Cantrell & Cochrane, headed by C&C managing director Mr Tony O'Brien. C&C, under the new management, expanded from its core drinks' business when it beat off strong competition from an MBO group to snap up crisps manufacturer Tayto for £68 million.

And suggestions that CRH's buying spree in 1998 might see the building materials group spend a period bedding down the Ibstock cement business proved wide of the mark. Mr Don Godson - in his final year as chief executive - sealed the £327 million acquisition of the Scancem businesses in Finland, Russia and Estonia.

But probably the most daring and innovative deal was Ardagh's £283 million takeover of the British group, Rockware, a group that is four times bigger than Ardagh itself. In terms of financial engineering, the Ardagh/Rockware deal was by far the most complex, but it shows the sort of heavily leveraged deals that can be done by small companies.

One notable absentee from the list of big deals was Kerry Group, which has been involved in some of the biggest acquisitions in recent years. But Denis Brosnan has already dropped a strong hint that it won't be long before Kerry is back on the acquisition trail and is prepared to spend £1 billion for the right buy. Market sources in Dublin believe Kerry will make its next big move before the end of the current year.

One notable event that was completed after a seemingly interminable delay over the final terms was the £247 million merger of Jurys Hotels and Doyle Hotels. This merger leaves the Doyle family with a 25 per cent stake in the merged group.

Other big hotel deals are also likely over the next year with the expected sale of Great Southern Hotels by Aer Rianta and speculation that Fitzpatrick Hotels will move to expand its operations through acquisition.

Other significant deals included Waterford Wedgwood's expansion into upmarket saucepans with the £82 million acquisition of the US group, All-Clad; and Telecom Eireann's series of small acquisitions ahead of the flotation; although the £60£70 million takeover of the Horizon computer group has still to come to pass.

Telecom was also the main beneficiary of the controversial sale of Cablelink to NTL for £535 million, an acquisition that was contested - unsuccessfully - all the way to the High Court by Denis O'Brien's Esat Telecom. Telecom has 75 per cent of Cablelink with RTE holding the 25 per cent balance.

The other big acquisition of an Irish company was ADC's £533 million takeover of the Irish-registered but US-headquartered Saville Systems. The directors and staff of software group Euristix probably have most to be happy about, first selling their company to US group Fore Systems for £58 million worth of Fore shares, only to see the value of those shares more than double in a matter of months after Fore was taken over by the British electronics group GEC.