·                   Deal value has risen by 17% for the first half ofthe year while the volume of deals for the first half of 2015 dropped by 14%compared to last year; 
·                    European M&A market remains attractive toforeign acquirers; 

Frankfurt, 29 September 2015.M&A deal value is at its highest level since 2007, but Europe's executivesare adopting a more cautious outlook on European M&A, according to researchcarried out by the top 10 international law firm CMS, in partnership withMergermarket. 

The report’s respondents comprise230 key M&A stakeholders across all European geographies, including CEOs,finance directors, bankers, M&A heads, private equity investors and sectorspecialists. Each respondent gave their views on the areas for growth, economicand political pressures and key players in the M&A market producing arounded macro- and microeconomic outlook for the next year. 

The research showed that dealvalue has risen by 17% for the first half of the year, helped by large dealssuch as Royal Dutch Shell’s EUR 74.5bn acquisition of the UK’s BG Group. Volumeof deals, however, dropped by 14% in the first half of 2015 with 2,800 dealscompared to 3,300 for the same period last year. 

According to the research, the topbuy-side driver of M&A in Europe will be increased appetite from foreignacquirers (66%), overtaking capital raising for expansion in faster growingareas (the top buy-side driver in 2014). Foreign acquirers with cash to spendare looking to Europe to snap up healthy assets. 

An issue that could affect theM&A growth outlook for the coming year is the possibility of a “Brexit”.Two thirds of respondents believe that if Britain were to exit the EU it wouldnegatively impact British M&A, but 160 of the 230 (70%) respondents believethat a "Brexit" is either somewhat or very unlikely. Overall,respondents are clear that it makes business sense for the UK to stay withinthe EU, and are optimistic that it will do so. 

Stefan Brunnschweiler, Global Headof CMS Corporate/M&A group, said, “Our report echoes the dualistic attitudeto European recovery in the M&A sector. On the one hand, confidence issparked by the IMF forecast that euro-area GDP in 2015 will be above 1% for thefirst time since the post-Lehman financial downturn. However, respondentsbelieve that political uncertainty and regulatory issues remain seriousconcerns for European businesses, and are circumspect about a return to healthfor the Eurozone.” 

The findings also indicated thatinvestors and corporates are becoming increasingly more creative in theirattitudes to funding with private equity and non-bank lending being regarded aspotential sources of financing showing a move away from traditional banks. 

In terms of activity volume, TMCis to be the most sought after this year, up 15% from 2014 and overtaking theIndustrials and Chemicals sector. Germany retains its lead position, now with49% of the respondents' vote, as the busiest M&A market for the comingyear, with the Nordic region in second and the UK in third place. 

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