European Companies Need to Get Bigger or Risk Being Acquired

Last month, Kraft Heinz made, and then pulled, an audacious $143 billion bid on Unilever. Earlier this month, the Dutch paint maker Akzo Nobel rejected a $22 billion acquisition bid by American rival PPG Industries Inc. The two unsolicited bids on European Firms may not be the last we have seen this year.

This is because leverage in Europe looks very low by global standards, as companies exploited cheap debt costs amid quantitative easing. Besides, with a weakening euro and pound, European issuers are starting to look tempting takeover targets for foreign buyers, according to Bank of America Merrill Lynch.

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