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The volume of mergers, acquisitions and IPOs in Europe have been rising sharply, and Morgan Stanley has identified 11 stocks that could capitalize.
In a note Wednesday, European equity strategists Matthew Garman and Graham Secker highlighted that M&A volumes have risen to their highest levels since 2008 in the last six months, while the number of initial public offerings is near post-financial crisis highs.
Drawing on historical comparisons, they pointed out that companies announcing spin-offs of business units typically perform strongly up until the spin-off is completed, but the spun-off entity will then outperform its parent over the next 12 months.
They picked out 11 companies that are either already restructuring or disposing of businesses, or where such a move is under consideration, but whose stock is cheap considering the potential value added by upcoming corporate activity.
Here’s the list: