US mergers and acquisitions (M&A) activity plunged to a 15-year low in August, while global fees for completed deals hit their lowest level since at least 1998, preliminary data showed on Friday. Thomson Reuters data showed announced USM&A for the month totalled $13 billion, its lowest since February 1994, while global M&A stood at $72 billion, the lowest since February 2003. Year-to-date, however, European M&A has suffered even more, with total deal value halving to $378.4 billion. US mergers, at $441.5 billion, have fallen 40 percent from a year ago. European M&A volumes were boosted in August by the takeover tussle that concluded with Volkswagen buying a stake in Porsche and Qatar buying options from Porsche that gave the emirate a 17 percent stake in VW. The largest US deal was Warner Chilcott's $3.1 billion purchase of Procter & Gamble's prescription drug business. Fees for completed deals stood at $694 million in August, the lowest since records started in 1998. Morgan Stanley has overtaken Goldman Sachs as the world's busiest financial adviser by deal volume, working on $439.7 billion of deals in 2009. In Brussels, meanwhile, the European Commission on Friday approved Lufthansa's takeover of Austrian Airlines (AUA) but said the German flag carrier must make promised changes to resolve competition concerns. Lufthansa has offered remedies to concerns voiced by Brussels that the deal could leave consumers with reduced choice and higher prices on five routes, most of them between Vienna and German cities. Lufthansa swiftly accepted the conditions to seal a deal which makes it the uncontested leader in the European airline industry. All of the necessary conditions for the merger have now been met and so “Austrian Airlines will be integrated into the Lufthansa Group as of September 2009,” the German company said in a statement. For its part Austrian Airlines welcomed the news while announcing it would slash management numbers by nearly half as part of ongoing restructuring plans. “Lufthansa is a big chance for us, it'll give us enormous thrust but we can't just lie back. It's up to us to turn this thrust into speed and altitude. We've got to do our homework,” AUA co-chairmen Andreas Bierwirth and Peter Malanik said in a statement. Lufthansa had offered to give up 19 takeoff and landing slots in Vienna to encourage greater competition in order to get the EU commission's vital backing.
