European companies in $87-bn US deal spree

European companies are snapping up US targets at the fastest pace since 2008 as they use cheap financing and record cash levels to seek growth outside of the continent. From German drugmaker Merck KGaA to British American Tobacco Plc, European acquirers announced $87 billion of deals in the US in the third quarter, more than the previous 12 months combined, according to data compiled by Bloomberg.

That spending helped drive global deal volume to $886.7 billion, a 29 per cent jump from the year-earlier quarter, the data show.

While dealmaking within Europe's borders picked up earlier this year, the leap across the Atlantic reflects an appetite for opportunities that can't be found in the region. Added to an already robust flow of dollars from the US to Europe, the increase means "cross-border deals have become the norm rather than the exception," said Gilberto Pozzi, head of mergers and acquisitions at Goldman Sachs Group in Europe, West Asia and Africa.
 

"European companies are keen to look outside Europe for the right strategic deal," Pozzi said. "The US remains a very attractive market for European businesses that want to boost growth and market share overseas given its size and structure." Cash at European companies rose 58 per cent to $1.31 trillion in the latest fiscal year, from $829 billion five years earlier, data compiled by Bloomberg show. That amount excludes cash held by financial companies.

Germany's Merck on September 22 agreed to acquire St Louis-based medical-equipment manufacturer Sigma-Aldrich for more than $16 billion, in what would be the biggest acquisition in its 346-year history.