Smith & Nephew Tops European M&A Targets for Second Year in Row

  • ITV, Syngenta came in second in Bloomberg survey of analysts
  • M&A spending broke records to reach all-time-high in 2015

Smith & Nephew Plc, the British maker of replacement knee joints and medical devices, is the top European acquisition target for the second year in a row in a Bloomberg survey of traders and analysts.

Telecommunications company ITV Plc and pesticide maker Syngenta AG were a close second, according to the survey, based on interviews with 15 M&A and event-driven traders and analysts.

Smith & Nephew, which has a market value of about $14.6 billion, has been repeatedly linked to a tie-up with U.S. peer Stryker Corp. in media reports. In December, financial blog Street Insider said Stryker had offered about $18 billion for the U.K. company, citing a person with knowledge of the matter who it didn’t name.  

Stryker Chief Executive Officer Kevin Lobo said this month that M&A is a priority for the company and will continue to drive sales growth.

The predictions follow 2015’s record breaking year for deals, when companies globally spent $3.8 trillion on M&A, surpassing the previous record set in 2007, according to data compiled by Bloomberg. Spending on European companies made up about 21 percent of that.

Syngenta, ITV

Syngenta’s board has thrown its support behind a sale to China National Chemical Corp., people familiar with the matter said this month. The companies may try to reach a formal agreement by the Chinese New Year in early February, they said. Last year, the Swiss company rebuffed a takeover attempt by Monsanto Co.

The agricultural chemical sector may see a wave of consolidation as companies reposition themselves following last month’s $130 billion merger agreement between Dow Chemical Co. and DuPont Co., the largest ever in the chemicals industry.

ITV, a U.K. TV production house, has caught the eye of billionaire John Malone. Malone has spent more than $50 billion expanding in Europe in the last decade, and his Liberty Global Plc increased its stake of ITV to 9.9 percent last year. Peel Hunt analyst Alex DeGroote said in a note that ITV has been a “bid target” in the media sector for years.