GO
Loading...

Enter multiple symbols separated by commas

Transatlantic Mergers Surged 30% in 2006

Transatlantic mergers and acquisitions surged 30% in 2006 from a year earlier, with buyers from the U.S. side spending a record amount on European businesses, according to Thomson Financial.

U.S. acquirers spent $109.6 billion buying European companies in 2006, with a total of 740 transactions. That marks almost a 15% increase over the number of deals in 2005.

Analysts point to a less-regulated market in Europe to account for the upsurge in purchasing activity by U.S. firms.

"There's no Sarbox concerns [in Europe] that some would be concerned about," Thomson Financial Senior Researach Analyst Richard Peterson told CNBC's Rebecca Jarvis. "That being said, though, it's a growing market, an integrated currency. The growth rates in many sectors of many countries are expected to exceed that of the United States, and the valuations seem attractive."

Those valuations have drawn the attention of both strategic and private equity bidders in the U.S. Goldman Sachs' private equity arm, for instance, spent $6 billion to acquire Associated British Ports in August. In one of the bigger deals, the New York Stock Exchange is expected to buy the Paris-based Euronext exchange for $14 billion.

But M&A dollars flow across the Atlantic both ways. The single largest transatlantic buyout this year was made by France's Alcatel, which spent $18 billion to scoop up Lucent Technologies. Overall, European buyers acquired 420 U.S. companies in 2006.

Cross-Atlantic mergers are likely to maintain steam into next year, analysts say, but 2007 might see most of the buying activity come from the European side. An expected slowing in the U.S. economy, combined with a weakening dollar, could make U.S. targets more attainable to foreign buyers.

In contrast, valuations in the EU are climbing as European economies grow stronger.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Closing Bell Exchange: What's holding Fed back?

    Reacting to the Fed, Peter Costa, Empire Executions, says he is concerned about slow wage growth. Kate Warne, Edward Jones, and CNBC's Rick Santelli, weigh in.

  • Fed statement changes

    The Federal Reserve updated its statement saying there are "solid" job gains, and only "some" improvement in jobs needed for the rate hike. Insight, with CNBC's Steve Liesman.

  • Low rates loves real estate: Lutnick

    Howard Lutnick, Chairman and CEO of both Cantor Fitzgerald and BGC Partners, discusses his company's stock price, and which economic conditions benefit profits.