The euro, meanwhile, has fallen by about 13 percent against the dollar since the sovereign debt crisis began two years ago, making conditions even more favorable for U.S. buyers. Potential Japanese acquirers have the advantage of a yen that has gained about 10 percent in the past six months against a benchmark basket of currencies including the euro.

While few companies are clamoring for access to the European market itself, “in many cases, what overseas buyers are really acquiring in Europe is technology, or access to emerging markets,” said Giuseppe Monarchi, head of European M&A at Credit Suisse Group AG.

J&J's planned purchase of Synthes will give the U.S. health-care products maker devices used to treat bone fractures and trauma, while Hewlett-Packard Co.'s $10.3 billion takeover of the U.K.'s Autonomy Corp. in November handed it data-sifting enterprise search technology helpful to cloud computing. In buying Luxembourg-based Skype Technologies SA for $8.5 billion in October, Microsoft Corp. absorbed the world's biggest provider of Internet telephone service.

Emerging Markets

European companies have also tended to be more aggressive than their U.S. counterparts in expanding in markets like Africa and the Middle East, spending about $90 billion on deals in those regions since 2000, Bloomberg data show. That compares with about $50 billion of such takeovers by U.S. companies.

So far, access to those markets and technologies mean many European targets are still worth having. However, a protracted slowdown and a failure by European policy makers to resolve their fiscal challenges may damp the outlook for dealmaking.

A degree of reluctance to do deals will “likely persist until there's some resolution to the debt crisis,” said Goldman Sachs's Lemkau. “The interest is still there, but the volatility and uncertainty in the markets makes the likelihood of most acquirers taking action low.”

Moody's Investors Service said Dec. 12 it will review the ratings of all European Union countries after a summit last week in Brussels failed to produce “decisive policy measures” to end the region's debt crisis. Standard & Poor's placed the ratings of 15 euro nations on review for possible downgrade on Dec. 5.

Dealmaking in Europe declined in the second half to the slowest pace since 2008, with foreign buyers announcing $86 billion of acquisitions, 48 percent less than in the first half, Bloomberg data show.

There were more than $8 billion in takeovers announced globally today, including New York-based Apollo Global Management LLC's agreement to acquire Belgian chemical producer Taminco Group Holdings from CVC Capital Partners Ltd. for about 1.1 billion euros ($1.4 billion), the data show.

Still, many companies have recently expressed an interest in Europe. General Electric, based in Fairfield, Connecticut, said in November it's targeting European deals as it seeks to compete with German rival Siemens AG. Fast Retailing, owner of the Uniqlo fashion brand, is seeking European targets to offset stagnant sales at home, Chief Executive Officer Tadashi Yanai said last month. HNA, meanwhile, has said it has a $6 billion war chest for acquisitions in Europe and the U.S.

“The U.S. went into recession earlier than Europe and came out of it faster,” said David Silver, head of European investment banking at Milwaukee-based Robert W. Baird, which typically focuses on deals valued at as much as $1 billion. “American companies are armed with stronger balance sheets and want to deploy capital.”

Cash Stashes

A study of 258 U.S. corporations by JPMorgan Chase & Co., published in September, found they held $368 billion abroad, roughly half of their total cash, cash equivalents or investments. Microsoft and Hewlett-Packard both cited a need to find a healthy return on their cash held overseas when announcing their takeovers of Skype and Autonomy, respectively, earlier this year.

U.S. companies may face competition from Asian acquirers, who have announced about $72 billion of takeovers in Europe so far this year, up 42 percent from the same period a year ago, according to Bloomberg data. Japanese acquirers led dealmaking, more than doubling their purchases to $34 billion.

“Japanese companies are getting serious about acquisitions abroad,” said Hernan Cristerna, head of M&A for Europe, the Middle East and Africa at JPMorgan in London.

Takeda Pharmaceutical Co.'s $13.7 billion takeover of Nycomed ASA, a Norwegian supplier of pharmaceuticals, was the biggest acquisition by an Asian buyer in Europe. More recently, Suntory Holdings Ltd. entered talks to buy bottled-water assets from France's Danone SA, people familiar with the matter said in October.

On the whole, a bleak economic outlook hasn't changed the fundamental attractiveness of at least some European companies, dealmakers say.

“International companies are stepping up their focus on Europe,” said Jean-Baptiste Charlet, head of global industries for Europe, the Middle East and Africa at Morgan Stanley. “The euro crisis still scares them, but there's a lot of technology to be gleaned and the companies here are very well-developed internationally.”

Bloomberg News

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.