LIVE MARKETS-How to play the global M&A wave in Europe

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HOW TO PLAY THE GLOBAL M&A WAVE IN EUROPE

European mergers and acquisitions are staying resilient this year even as the region moves from leader to laggard in a strengthening global deal cycle.

Morgan Stanley strategists say Europe's deal activity is growing at around 5%, down from last year's 50% surge, but is still rising thanks to healthy balance sheets, easing competition rules and a global M&A rebound.

The bank believes markets are in the "early innings of a multi-year global M&A rebound" and forecasts growth of 32% this year in announced volumes, followed by a 20% rise in 2026.

Europe is not setting the pace, but it's riding the wave.

So, how to play it?

MS flags four European sectors where it sees a significant surge in deal-making: Metals & Mining, Business Services, Telecoms and Defence. Real Estate, Diversified Financials, Building & Construction and Banks also screen well.

Its preferred plays in the M&A cycle include top picks such as BT BT.L, Rheinmetall RHMG.DE, Bureau Veritas BVI.PA, Experian EXPN.L, CRH CRH.N and Saint Gobain SGOB.PA.

"We continue to see M&A as a core positive driver for European equities for the next 12 months," says MS in a note published on Monday.

(Danilo Masoni)

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