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Foreign Buyers Shrug Off Brexit Fears With Record Europe Deals

Dec. 21, 2016
Acquirers from outside the continent announced more than $380 billion in deals for companies in the region this year, the most in at least 26 years.

In a tumultuous 2016, buyers are flocking to Europe.

Acquirers from outside the continent announced more than $380 billion in deals for companies in the region this year, the most in at least 26 years, according to data compiled by Bloomberg. That’s up about 46% from the same period last year, the data show.

The U.K.’s June vote to leave the European Union pushed the pound down to its lowest value compared to the dollar in decades. The value of the euro has also dropped, making assets in the region look relatively cheap to outsiders.

“More mature technology companies, favorable foreign exchange rates and a relatively open regulatory environment are among factors luring foreign buyers despite the political uncertainty,” said Graeme Sloan, a partner and co-chair of M&A at law firm Morrison & Foerster LLP.

Chemical companies -- including Swiss pesticide maker Syngenta AG and German industrial gas company Linde AG -- were the most attractive to non-European bidders, with about $94 billion in spending, according to the data. That was followed by deals for technology firms, including Qualcomm Inc.’s agreement to buy Dutch chipmaker NXP Semiconductors NV and SoftBank Group Corp.’s acquisition of Cambridge, England-based chip designer ARM Holdings Plc.

Bidders from Asia announced about $160 billion in deals in the region, driven by Chinese demand for foreign assets, the data show. That trend may be curbed next year as the Chinese government works to curtail large deals of at least $10 billion and acquisitions of at least $1 billion outside a buyer’s core business, people familiar with the matter said last month.

Still, “Asian players in particular have a huge appetite for growth and have been able to find some interesting European targets,” Sloan said. “This trend is poised to continue next year, when we expect to see more, but probably smaller technology deals taking place.”

By Amy Thomson and Manuel Baigorri

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