Merger transactions up 70%, but deals down

MERGER transactions notified to the Competition Authority were up 70% last year, but the number of deals fell back to 2003 levels.

A report from McCann FitzGerald found that media, food and agriculture were the most active sectors in 2010.

Partner with McCann FitzGerald’s Philip Andrews said 2010 was a mixed year for Ireland’s M&A activity. “While, on the one hand, we have seen a 70% increase in notifications, this follows a record low in 2009 and takes us back to 2003 levels when 47 deals were notified to the Competition Authority. Compare this to 98 deals in 2006.

“On the other hand, of the 46 deals notified in 2010, 18 involved an Irish target. This represents an 80% increase from 2009 and suggests that Irish deal-making may be keeping apace with the global upswing,” he said.

Of the deals notified in 2010, 89% involved acquisitions of a majority stake, 11% related to joint ventures or acquisitions of joint control.

Media deals represented the highest proportion of notified deals at 20%, which the report said reflected the lower notification thresholds for media mergers and restructuring in the sector. Consolidation across the food and agriculture sector also triggered a high proportion of filings, accounting for 13% of the total.

The authority continued to demonstrate flexibility in facilitating distressed deals, according to the findings. Club Travel’s acquisition of Budget Travel was cleared within three weeks of filing and UPC’s acquisition of liquidated local broadband operator Broadworks, and Oaktree Capital’s examinership acquisition of several McInerney businesses, were both cleared within two weeks.