M&A cycles in France

 Our colleague Matt Aslett recently hit on an incredibly creative and entertaining series of posting on our sister blog CAOS Theory pegged to Euro 2008. He profiled the open source projects and policies in the 16 countries that took part in that soccer (errr, football) tournament. (A Brit, Aslett found himself with a fair amount of free time last month since his country didn’t qualify for the European championships.) Not only did Aslett review all the open source goings-on in the respective countries, he even had them square off against one another, as if they were on the soccer field (errr, football pitch). Eventually, he crowned France this year’s Open Source Champion.

We here at Inorganic Growth are decidedly less creative and industrious than our colleagues over at CAOS Theory. So, with that as back-drop, we try our own entry pegged to a major three-week sporting event in Europe: The Tour de France. The 2170-mile counter-clockwise trip around the country starts on Saturday in wind-swept Brittany. For the first time in 40 years, the Tour opens with a normal road stage rather than a ceremonial prologue. (It’s also the first time in about a decade that the defending champion will not be at the start, as cycling continues its lopsided fight against dopers and other cheats.)

When we punched up the numbers for French M&A in recent years, we have to say we were a bit shocked by how thin the peloton of deals has become recently. In the first half of 2008, we saw just 47 deals involving either French buyers or sellers, with total spending of just $1.2bn. That compares to 62 deals worth $7.8bn in the same period last year and 68 deals worth $18.4bn in the first half of 2006.

With that in mind, we decided not to award a yellow jersey, signifying a clear leader. Instead, we’ll got to the other end of the results and hand out an award for the ‘lanterne rouge’ – the designation for the last-place Tour de France rider. The winner of the ‘anti Yellow Jersey’: Alcatel’s $13.4bn purchase of Lucent. We put this deal, inked in April 2006, on top of the podium because the combination has destroyed more than $22bn of shareholder value in just two years. Felicitations, Alcatel-Lucent.

French deal flow

Period

Deal volume

Deal value

Jan.-June 2006

68

$18.4bn

Jan.-June 2007

62

$7.8bn

Jan.-June 2008

47

$1.2bn

 

Source: The 451 M&A KnowledgeBase