Transatlantic mergers and acquisitions (M&A) activity is forecasted to surge, driven largely by the relative strength of the US dollar, as well as improving financing conditions, thereby triggering US bidders to invest in a greater amount of European assets. JD Supra provides a detailed account of the situation.
Prior to the convergence of geopolitical disruptions and public market volatility, brought on by the war in Ukraine, transatlantic M&A was experiencing an unprecedented level of activity. The total value of deals involving US bidders targeting Western and Central & Eastern European companies reached a soaring US$239.24 billion in 2021.
However, the situation in Ukraine catalysed a significant drop in dealmaking, reducing the total worth of deals to US$84.6 billion in 2022, an alarming 65 percent decrease year-on-year.
While goliath law firm White & Case stress that short-term fluctuations are, to an extent, a normal part of M&A cycles, they further underscore the overall bullish trend this engagement represents. Fundamentally, the condition of the dollar and its impact on financing is a determining factor in the spike of US bidders for European assets.
With the current international economic climate, the probability of an aggressive comeback of the transatlantic M&A bull run seems plausible. Legal professionals across the globe are encouraged to keep a close watch on these developments, as they are likely to shape significant global economic trends in the coming period.