Europe turns to Europe for deals as US and Asia M&A slips

London

EUROPEAN companies are turning to their backyards for growth via mergers and acquisitions (M&A).

The volume of deals in Europe in the first half of the year reached about US$250 billion, more than 70 per cent higher than spending in the first two quarters of 2016, according to data compiled by Bloomberg.

Markets are beginning to settle from tumultuous political events, such as the UK's decision last year to leave the European Union and the French presidential elections, and economies in southern Europe are improving, pushing the continent's chief executives to look for new growth at home.

At the same time, relatively high equity valuations - European companies' shares have a total return of about 10 per cent this year, in line with their counterparts in the US - are enabling businesses to make purchases using stock. That's helped Europe outpace dealmaking in the US and …