Europe Faces ‘Wake-Up Call’ Amid U.S. Deal Boom, JPMorgan Says

(Bloomberg) --

European companies will likely follow their North American counterparts in pursuing consolidation to avoid being left behind, according to a top dealmaker at JPMorgan Chase & Co.

Uncertainty in Europe has been holding back top business leaders on the continent from making major acquisitions this year, JPMorgan’s global M&A co-head Hernan Cristerna said in a Bloomberg Television interview Monday. In the fourth quarter, “the dam has broken” and some European companies like PSA Group, LVMH and Novartis AG started announcing significant purchases, he said.

Dealmaking in Europe should rise next year, as a string of large transformative transactions involving U.S. companies this year was “a wake-up call for the rest of the world,” Cristerna said. At some point European companies will start losing their competitive edge if their American counterparts keep growing, so companies on the continent will need to pursue consolidation despite the uncertain outlook, he said.

“You have to evolve, you have to keep moving forward. In this market you cannot remain still,” he said. “You just have to become more global, you have to find new sources of growth.”

European dealmaking has lagged behind the U.S. this year, with only a single acquisition from the continent of more than $10 billion in the first half, according to data compiled by Bloomberg. U.S. companies have announced a slew of megadeals including United Technologies Inc.’s acquisition of Raytheon Co., which is set to create a defense behemoth worth more than $100 billion, and Bristol-Myers Squibb Co.’s $74 billion purchase of Celgene Corp.

To contact the reporters on this story: Ben Scent in London at bscent@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Ben Scent, Emma Ross-Thomas

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