Corporate Ireland could see an increasing number of big mergers and takeovers this year as low interest rates and a buoyant economy stoke up activity in the market, a leading corporate finance firm said today.
Research by Ion Equity published today shows that Irish companies were involved in mergers and acquisitions worth almost € 4 billion in the first quarter of 2005, double that recorded in the same period last year.
According to Ion Equity director Joe Devine, the survey shows a clear movement towards fewer but larger deals. There were 29 deals in the first quarter of 2005 compared to 50 in the final quarter of 2004 and 70 in the first quarter of 2004, according to the survey.
One major transaction, Waren Acquisition's euro €2.3 billion takeover of Warner Chilcott (formerly Galen) had a significant impact on the total value of deals in the first quarter accounting for 58 per cent of deal values.
Interestingly the most acquisitive Irish firms in recent years such as CRH and Kerry Group were quiet in the first quarter or have yet to disclose and deals struck.
The second biggest transaction in the period was the sale of Superquinn for €420 million while the leisure sector was notably active with the acquisition of the Belfry Golf Club by the Quinn Group for €270 million and Quinlan Private's disposal of the Savoy Hotel in London for €328 million.
Other notable deals included Bank of Scotland (Ireland)'s €120 million acquisition of the ESB retail business and Kingspan's €98 million acquisition of Century Homes.
Mr Devine said the deals reflected the buoyancy of the Irish economy at the moment and with low interest rates set to continue the trend is likely to be maintained in the months ahead.
"Rising valuations across a variety of sectors are also likely to stimulate activity from vendors while investment capital is in plentiful supply for buyers," he added.