The UK led the European field for IT merger and acquisition (M&A) activity in the third quarter of 2004, accounting for 28 per cent of all deals.
According to a study released last week by M&A watcher Regent Associates, there was a total of 1,742 M&A deals across Europe in Q3, compared with 1,018 in Q3 2003. This increase was brought about by "cost-cutting exercises of the past few years, rather than revenue increases", the study claimed.
The most active area of all was the IT services sector.
The UK saw more than 180 M&A deals in the quarter, giving it a clear lead in Europe. Its nearest competitor was Scandinavia, with just over 100 deals.
James Calvert, chief executive of Regent Associates, claimed the differences were due to "cultural issues".
He said: "Many European countries are undergoing a cultural change - for example, until recently it was regarded as a failure in Germany to sell your business. In the UK, M&As are just a function of the capital market.
"The UK economy has been operating more successfully than many continental ones and we are probably embarking on six to eight years of healthy growth, so I expect the number of M&A deals to increase."
Kate Hanaghan, research analyst at Ovum-Holway, agreed, but warned: "The last time there were this many acquisitions was in 2000, and we all know what happened then."
Hanaghan said larger firms are looking to sell off "under-performing or unwanted divisions".
Nitin Joshi, partner at PKF, backed up the study. "We have seen a significant increase in M&A activity this year. There is more readiness on behalf of venture capitalists and private equity to invest than over the past two or three years," he said.
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