Already this year, French oil giant Total SE agreed to invest $2.5 billion in Adani Green Energy Ltd., following its acquisitions of a French biogas producer and a stake in a large U.S. solar portfolio. Energy majors including BP Plc and Royal Dutch Shell Plc are also selling some carbon-intensive assets to free up funds for greener initiatives.
“There will be more activity as some of the large companies in Europe seek to become more global renewable energy players,” Garcia said.
M&A Outlook
Goldman Sachs sees a range of sectors, not just technology and energy but also financial services and health care, keeping European dealmaking resilient in 2021. Still, cross-border transactions could become harder to pull off: Alimentation Couche-Tard Inc. this month abandoned talks on a mooted $20 billion acquisition of Carrefour SA following French government opposition.
“A combination of the current political environment coupled with a degree of protectionism as we come out of Covid is likely to result in a period where there is a greater degree of government intervention in transactions,” Gutman said.
The bank continues to view the U.K. as the region’s largest market for activity, Brexit notwithstanding. The country traditionally accounts for 25% to 30% of European deal volumes, and that’s unlikely to see a material change, Gutman said.
Goldman Sachs was the top M&A adviser globally and in EMEA last year, data compiled by Bloomberg show.
SPAC Charge
One of the recent drivers of global M&A has been a proliferation of blank-check companies, which raise investor money in the public markets and then hunt takeover targets. Business moguls across industries have raised billions of dollars via such vehicles, also known as special purpose acquisition companies. Goldman Sachs ranked third as an adviser on global SPAC listings last year, Bloomberg data show.
Though there have been signs the market is starting to grow in Europe, SPAC founders continue to overwhelmingly target the deeper pools of capital in the U.S.
“Europe is in an incredibly nascent stage for SPACs. We’ve seen next to nothing here,” said Garcia. “Success here could be determined by the success or failure of the product in the U.S.”
This article was provided by Bloomberg News.