‘M&A Insights: Telecoms Sector’ reveals total deal values of over €150 billion for both 2005 and 2006 compared to €36 billion in 2004. Some substantial deals have also returned such as the €6 billion plus acquisition of Wind in Italy and Amena in Spain, while 2006 saw the €25 billion acquisition of O2 by Telefonica.
European deal volumes have remained generally stable over the past three years with 433 transactions in 2004, 447 in 2005 and 422 in 2006.
International cross-border acquisitions continue to represent the largest share of deal activity, accounting for 42 percent of the activity in 2005 and 2006. The buyback of minority interests and consolidation has been a major driver of deal activity at the domestic level. The largest growth has been the scale of transactions by financial investors rising from 6 percent (in total) in 1999 to 24 percent (combined 2005 and 2006).
Philip Shepherd, telecommunications, media and technology leader strategy, PricewaterhouseCoopers LLP commented: “The surge in telecoms deals can, in part, be attributed to the restoration of the large players’ balance sheets and their refocus on fixed-mobile convergence and international expansion. However, as our research shows, cross-industry based convergence deals are still relatively small and have attracted a disproportionate amount of interest both from the marketplace and the media.”