Europe M&A activity remains buoyant with US activity continuing to march ahead

US deal activity has continued surpassing pre-pandemic levels, whilst activity remains buoyant in Europe, according to the latest analysis from RSM*.

Transaction data in Q4 2021 shows 4,061 deals by private equity (PE) or corporates completed in the US, which is 30% higher than deal volumes in Q4 2019. A total of 2,546 deals were reported as completed across Europe, still at a level 6 per cent above average levels witnessed throughout 2018 and 2019. This deal total will increase even further as more Q4 2021 deals are announced as we go through 2022. 

Commenting on the data, Lee Castledine, RSM UK partner and a member of RSM's Global Due Diligence Leadership Team, said: ‘Deal volumes continue to remain buoyant with high levels of capital available. The appetite from both private equity investors and corporates also remains strong and currently shows no signs of slowing down as we progress into 2022.  

‘At present the availability of capital and the push to undertake transactions is more than offsetting issues that might serve to soften demand. There are a number of factors that might undermine confidence in the market and specific sectors in particular, which might dampen deal activity as the year progresses.  

Whilst the Russia / Ukraine crisis might not affect Western Europe through levels of direct trading, impact may come through commodity prices and increasing energy prices. Such increases and general volatility will impact manufacturers as well as consumer confidence where price growth continues to add pressure on the cost of living. Interest rate increases to combat inflation, albeit with interest rates still at historically low levels, may also serve to reduce the debt capacity of transactions in the leveraged buyout arena. 

‘Nevertheless, at present, deal levels remain high and whilst there are wider factors that could create a wider shock to the M&A market, we expect the M&A advisory and due diligence sector to remain busy and in high demand in H1 2022. ’

*Deal volume data source: PitchBook Data, Inc.; Data has not been reviewed by PitchBook analysts.