French Acquirers Set Sights on U.S. Amid European M&A Doldrums

(Bloomberg) -- French acquirers, stymied by European regulators and Brexit-weary Britain, continue to set their sights on U.S. targets for growth.

Energy company Engie SA is weighing an acquisition of construction and facilities services firm Emcor Group Inc., while Dassault Systemes SE is looking at U.S. deals including Medidata Solutions Inc., a software firm focused on clinical trials, Bloomberg News reported.

Europe’s third largest economy has seen a slowdown in dealmaking activity amid slumping growth and protests against President Emmanuel Macron’s policies. The volume of acquisitions involving French companies fell 45 percent to $34 billion this year compared with the same 2018 period, data compiled by Bloomberg show.

French firms’ ambitions to create European champions have also been stymied by regulators. Siemens AG and Alstom SA’s plan to merge their rail businesses was blocked in February by the European Union’s antitrust regulators, which rejected their arguments about the looming threat of Chinese competition.

Interest in U.K. targets has also cooled, as companies struggle to make contingency plans around seemingly endless Brexit negotiations.

There have been fewer hurdles so far for deals involving targets outside of Europe. Publicis Group SA said this month it would pay $4.4 billion for Alliance Data Systems Corp.’s Epsilon unit, its largest deal yet. Also this month, Engie and Canadian pension fund Caisse de Depot et Placement du Quebec agreed to pay $8.6 billion for a 90 percent stake in Petroleo Brasileiro SA’s natural gas pipeline unit TAG.

Foreign firms, including U.S. acquirers, have been more circumspect about buying into France, where doing large deals typically require navigating stringent labor laws and politics. And potential acquirers still haven’t forgotten how the French government swooped in to Danone’s defense when reports surfaced PepsiCo Inc. made a bid for the yogurt maker in 2005.

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