However, it has not always been plain sailing for either company, with two extensions to reach a final agreement needed to be granted in order to get the deal across the line. Issues, including job security for the UK-based employees, as well as the location of the new entity’s headquarters, were reportedly holding up the process and leading some to believe that it could still fall through. This should not surprise. While
only 38 deals have been canned in Europe so far this year, per the PitchBook Platform, the number stood at a whopping 254 in 2016 and appeared to be rising since 2012.
Failed or cancelled M&A deals in Europe
The stark decline this year may seem counterintuitive, as companies around the globe have been facing increasing regulatory pressures—a dynamic that resulted, for example, in the rebuffed merger between the London Stock Exchange and Deutsche Börse earlier this year.
What’s more, shareholder activism has become more prominent in Europe, with some of it designed to disrupt M&A as seen with investor White Tail taking a stake in Clariant to thwart its proposed $20 billion tie-up with Huntsman. Add to that the UK’s ongoing Brexit negotiations and a reported increase in protectionism from governments wanting to avoid a foreign takeover of prized assets, and the odds appear stacked against deals in Europe.
One possible change could be that companies have become more aware of the hurdles they are facing and appear willing to go head-to-head—sometimes for months—with reluctant shareholders or employee representatives. The $73 billion Linde and Praxair tie-up is a case in study of how companies with a vision can
work through differences.