Why Some M&A Deals Are Best Done In-House

When PPR, the French owner of Gucci, sold a stake in its African distributor CFAO in August, it didn’t use an investment bank to handle the transaction. Instead, the company turned to an in-house mergers-and-acquisitions team led by a former France Telecom M&A executive. “When we can, we do it on our own,” says group managing director Jean-François Palus.

Worldwide deal volume has plunged 53 percent since 2007, a victim of the weak global recovery and the European debt crisis. With the average size of deals shrinking 25 percent in that time—to $149 million, according to data compiled by Bloomberg—European companies such as BP and Siemens are relying on their own staffers for smaller transactions. Almost a third of completed European and U.S. M&A transactions this year were done in-house, according to data provided by Freeman Consulting Services, a New York-based research firm. For the U.S., that represents the largest adviser-free proportion of deals since 2003; for Europe, it’s the most since 2004.