Dealmaking Rebound Falters

Takeovers off 2% in second quarter as Europe threatens confidence.

Dealmaking failed to make a comeback in the second quarter as the European debt crisis and volatile stock markets forced companies to delay big acquisitions.

Takeovers fell about 2 percent from the first three months of the year to about $450 billion, the lowest level since 2009, according to data compiled by Bloomberg through June 27. Eaton Corp.’s proposed purchase of Cooper Industries Plc and Pfizer Inc.’s sale of its infant-nutrition unit were the only deals to top $10 billion.

Strong Fundamentals

Many conditions for dealmaking are ripe, spurring some chief executive officers to take the plunge.

Goldman Leads

“Notwithstanding the challenging macro picture, there is strategic interest from global acquirers in European companies,” said Gregg Lemkau, the head of M&A for Europe, the Middle East, Africa and Asia at Goldman Sachs Group Inc. “Valuations are down and there are a number of successful businesses with strong existing franchises that are available at what appears to be a discount.”

Emerging Markets

Emerging-market dealmaking has also been uncertain. Takeovers in Latin America slid 60 percent from a year earlier to $20.3 billion. Asia-Pacific’s total, up 6 percent from the first three months of the year, fell 22 percent from the same period a year earlier.

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