Ireland M&A market ‘steady’ in 2016 despite softening in second half

Ireland’s merger and acquisition (M&A) market in 2016 was steady in comparison with a more buoyant 2015, according to William Fry’s sixth Annual M&A Report.

However, the report - published today - also notes a marked difference between the first half of 2016 and the second six months of the year.

M&A deal volume increased 3 per cent from 125 deals in 2015 to 129 deals in 2016. M&A deal value also increased by 65 per cent to €26.8bn – however, this was largely down to US industrial Johnson Controls’ €14.9bn purchase of fire and security provider Tyco. Excluding this deal, value contracted 27 per cent to €11.8bn compared with the same period last year.

A closer comparison of annual figures reveals a pattern of ‘normalisation’, especially when comparing the first half of the year with the second.

Shane O’Donnell, partner and head of corporate/M&A at William Fry, said: “The Irish M&A landscape in 2016, in overall terms, has remained steady in comparison with 2015. However, while the first half of the year continued the trends from 2015 with robust deal levels, the second half of the year showed a softening in this performance.

“Macroeconomic and political uncertainty have led to businesses behaving with more caution than usual. As a consequence, dealmakers have paused to take stock before embarking upon new transactions.”

This domestic decline in activity mirrors global M&A trends – volume and value have fallen 4 per cent and 18 per cent respectively year-on-year.

According to William Fry, dealmakers are likely to have backed away from deals due to unpredictable political and economic developments, including the Brexit vote and the election of US President Donald Trump.