Broadview International LLC, a mergers and acquisition broker, says that the traditional flow of US money to Europe to acquire companies reversed in the first six months of 1999 as European companies went to the US to buy high-tech companies and expertise. For the first time in a decade, says Broadview, more than half of the 10 biggest technology deals in the world were executed by European players.
All told, European technology companies spent $72.8bn buying 94 US counterparts, a 34% increase on activity the year before, and a 293% jump in transaction value. Broadview believes that the increased acquisitiveness of Europe’s technology players is partly explained by the struggle of mature local companies seeking to refresh themselves with new technology blood. Siemens, Alcatel, Ericsson, Philips, Nokia, GEC and Vodaphone between them helped drive much of the US centered European M&A activity.
M&A activity was also on the rise within the continent, as Broadview recorded 1,095 European technology deals, an increase of 23.6%, and the value of these transactions jumped 338% to $193.4bn. This outstripped the global 92.3% increase in the value of technology mergers, which Broadview calculates reached a total of $544.8bn from 2,900 deals.
Predictably, internet related deals accounted for a growing proportion of the global total in the first six months of this year, with 447 digital media deals worth $37.5bn representing an explosive 665.3% rise in the value of similar deals struck in the first half of 1998. Most of these deals were struck in the US, but Europe contributed 73 transactions, an increase of 92.1%, and Broadview predicts that the internet deal total in Europe will reach 200 in the next 12 months.
However, while Europe may be catching up on the US in terms of internet deal making, the European internet landscape is evolving differently, Broadview notes. Mature media and telecoms groups are driving the process, says Broadview, suggesting that Europe’s old guard may have learned something from their US counterparts’ mistakes, and are determined not cede the internet future to rival upstarts.
