Irish deal-making ‘muted’ amid global slump

The value of Irish mergers and acquisitions in the first six months of 2023 slumped 58 per cent to €5.2 billion compared to the same period a year ago as deal-making plunged worldwide, law firm William Fry said. In its half-year review of the Republic’s buyout market the firm said the Irish economy was showing “notable resilience” to wider trends like inflation, higher interest rates and recession fears.

The prospect of a “significant uplift in the second half of the year looks limited”, said Stephen Keogh, head of corporate and M&A at William Fry. In line with global trends, which have seen reported global M&A levels fall by around 38 per cent this year amid geopolitical and economic upheaval, he said Irish deal-making activity has been “muted” and would continue to be so.

“This is not to suggest that deal-making will slow to a halt,” he said. “We expect reasonably healthy levels of Irish M&A activity in the second half of 2023, but no imminent return to the bumper volumes witnessed in the immediate aftermath of the Covid era.”

Some 177 transactions took place in the first half of the year, a modest dip of 2 per cent compared with the first half of 2022.

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Yet just three of those deals were worth €500 million or more – down from seven last year – the biggest of which was Chiesi Farmaceutici’s agreement to pay €1.34 billion for Irish-headquartered Amryt Pharma. That was almost twice the size of the next biggest buyout. Consequently so-called mid-market deals continued to “dominate”, the report noted. About 97 per cent of deals in the first half were valued at between €5 million and €25 million.

With the Amryt deal topping the rankings, the pharmaceuticals, medical and biotech sector accounted for 28 per cent of total activity in the first half, followed by industrial and chemicals (18 per cent).

International buyers were again significant players in the market, albeit at a reduced level of activity compared with the first half of 2022, according to the report, accounting for 113 of the 177 deals, more than two-thirds of the deals completed over the period.

“Unsurprisingly acquirers from the US and the UK accounted for a significant share of overseas interest in Irish targets,” said William Fry partner Fiachra Cork in the report. “UK acquirers agreed 43 deals in the first half of the year, with US acquirer responsible for a further 28. Acquirers from Sweden and the Netherlands, accounting for five deals respectively, were the next most active in the first half of the year.”