Irish companies spent IEP8.2 billion on domestic and foreign acquisitions in the year 2000, almost double the amount spent in 1999.
According to the latest CFM Capital Survey of merger and acquisition activity in Ireland, Irish companies acquired 231 companies in both the domestic and international markets, the bulk of which had acquisition values disclosed.
However for the first time foreign buyers were more active in the Irish market than Irish companies themselves, with the value of Irish companies sold to non-Irish buyers higher than those bought by Irish buyers. Some IEP10.4 billion worth of Irish firms were disposed of during the year to non-Irish buyers, compared to the IEP8.2 billion spent on acquisitions by Irish companies.
David Chapman, managing director of CFM Capital Limited, cited the sale during 2000 of the two major telecoms companies for the boost in the figures. He said that ‘Irish company owners do not view selling their businesses in they same way they once did. It is now a viable route to achieving growth through new ownership and releasing the value of the firm for the benefit of shareholders.’
The top five acquisitions by Irish companies in the Survey were of foreign companies, the biggest by pharmaceutical group Elan Corp which bought Dura for IEP1.65 billion in September 2000.
The value of deals in 2000 was also rising, particularly of foreign acquisitions. The top 20 transactions accounted for IEP6.8 billion, up from the 1999 figure of IEP3.45 billion.
According to Chapman ‘It has to be assumed that acquisition activity will continue apace but it remains to be seen if the same level of disposals is evident in 2001 as we have seen in 2000. The boost from the Telecoms sector may well be viewed as a one-off unless Government plans for further sales provide foreign buyers with new opportunities.’
In terms of disposals the number of Irish companies being sold to foreign buyers is significant, running to 54 in 2000 for which values were disclosed. The largest disposal of the year was in the IT/telecommunications sector with the ?3.5 billion agreed sale of Eircell to Vodaphone. In sectoral terms, IT/telecommunications dominated, accounting for 32 per cent of the overall total, with the UK providing 47 per cent of all buyers of Irish companies, and accounting for 63 per cent of the total spend. |
