EU: M&A fails threaten stock rally

A series of major merger deals that have imploded this year are forcing investors to take caution with their optimism for EU’s market, according to reports.

While financial experts expect an increase in merger activity throughout the EU – Thomson Reuters has reported that EU merger volume has already nearly doubled in the last year – recent flops of major deals is increasing skepticism among traders.

Among those high-profile fails includes Pfizer’s decision to reject an $118 billion buyout from pharmaceutical rival AstraZeneca. Early last month, advertising giants Omnicom and Publicis suddenly decided to abandon their merger, which would have created the world’s largest advertising agencies.

French engineering firm Alstom is currently the target of a major takeover, but the acquisition has been complicated by a bidding war between General Electric and Siemens, reports say.

With the correlation between mergers and the stock market, investors are now forced to use caution when major deals are announced, reports say.

Full content: Reuters

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