New mega-deals in European PE?

The NYT reports that cash-loaded private equity funds are pursuing even larger targets. The paper reports very early talks between Centrica, the British natural gas supplier (market cap: $15bn) and Compagnie de Saint-Gobain (market cap: $19bn), the French construction materials company. If the deal for the French firm gets more traction, it will be interesting to monitor the reaction of the French government.

Meanwhile, large pharmaceutical companies are increasingly dissatisfied of their (mandatory) participation to the reduction of the French social security deficit. The French government has recently announced that he will deduct $1bn from the pharmaceutical companies operating in France. The size of the cheque is large but CEOs of those firms are actually more worried by the political incertitude in France and in the words of the CEO of the French subsidiary of a US group: "Au siège, aux Etats-Unis, la direction générale place la France au même rang que l'Afrique." ("At the US HQ, the general management now compares France to Africa [in terms of political incertitude]"). The results of all this: a significant decline in FDI in that industry with R&D centers (thus jobs, government taxes...) relocating to Ireland, Germany or elsewhere. Way to go!