European Commission tracks investments and acquisitions using data from Orbis

The European Commission (EC) identified global merger and acquisition (M&A) trends using data from Bureau van Dijk’s award-winning Orbis database. In the first annual report on the screening of foreign direct investments into the European Union (EU), the report highlights the impact of Covid-19 on investments whether it is for M&A or foreign direct investment (FDI). Investment activity into the EU declined in 2020, with 35% fewer FDI and 34% fewer M&A transactions in comparison to 2019. Reduction in FDI and M&A investments in 2020 during the pandemic cost Europe over €31bn in greenfield investments, and the equivalent of 115,000 jobs that would have been created.

The Joint Research Centre (JRC) used insights gathered from the Orbis M&A and Orbis Crossborder Investment solutions. Analysis on historical investment datasets provides organizations like JRC with crucial information on past investment activity. When proactive screening is required in addition to historical assessments, analysts need access to live datasets on M&A and FDI. These datasets are part of the Orbis database, which connects deal information to underlying companies and ownership, and includes trade descriptions. Combining historical and live datasets enables identification of dual use companies, and the associated risks through investments and acquisitions. It also enables state-wide national FDI and investment screening mechanisms, which are important for the trend analysis below.

Figure 1 shows that investments took a hit in the early part of 2020 but bounced back in late 2020 to early 2021.

Figure 1: General trends of foreign M&A deals into the EU from January 2019 to March 2021

Source: JRC calculations on Bureau van Dijk data extracted on 6 May 2021. Trend refers to 3-months rolling average. Foreign M&A deals indicate deals where the investor is ultimately owned by a non-EU entity.

Through the comparative data analysis into M&A deals by volume between 2019 and 2020 – we can now say that the pandemic had a negative impact on investments in EU states, and was particularly significant for some countries including France, Sweden, and Germany.

Figure 2: Number of foreign M&A deals by target EU country: Share over the total in 2020 and percentage change with respect to 2019

Source: JRC calculations on Bureau van Dijk data extracted on 6 May 2021.

The following regions were identified as having the largest share of investments for 2020 (region of origin of investments into Europe):
1. United States and Canada (M&A 35%, FDI 44%)
2. United Kingdom (M&A 31%, FDI 21%)
3. European Free Trade Association – EFTA Countries (M&A 12%, FDI 8%)
4. China (M&A 4%, FDI 8%)

Figure 3: Foreign M&A transactions in 2020 by nationality of the investor’s ultimate owner. Percentage change in 2020 as compared to 2019, and share over total in 2020.

Source: JRC calculations on Bureau van Dijk data extracted on 6 May 2021

Furthermore, the impact of the pandemic on M&A target industries was uneven, which is evident by the graphical analysis as shown in figure 4, with increased deals relating to pharmaceuticals, medical supplies and e-commerce. Whereas the highest impact with lowest number of deals related to travel, tourism and accommodation.

Figure 4: Foreign M&A deals by target EU sector, 2019-Q1 to 2021-Q1

Source: JRC calculations on Bureau van Dijk data extracted on 6 May 2021

Find out more about how our Orbis M&A and Orbis Crossborder Investment solutions facilitate this advanced data analysis.

You can also read the full report, published by the European Commission.