> the merchants aren't getting the same value
Groupon (much to the OP's point) is like every mindless American out there who thinks that you can simply copy and paste an American business model into any part of the world. The world does not simply work this way, but we (Americans) are brought up to think so.
The reason the merchants aren't getting the same value is because of what I explained above, that merchants aren't willing to give the same level of discount as their North American counterparts so people aren't redeeming as many deals, due to the discount not being as significant meaning the European market is only growing at 31%.
I'm actually from England, and Groupon actually made a smart acquisition from the Samwer Brothers of the MyCityDeal.de brand, even though it has received a lot of complaints (some of them were before the acquistion, and because the advertising laws across Europe all vary) however, Groupon has cleaned up these issues and openly admits to them which is why its outselling LivingSocial in the UK by 14 to 1.
Simiarly, whenever a company does any M&A it calculates the costs associated to expanding to the UK on its own, and the ROI from building its brand from scratch as opposed to purchasing a company outright and folding it into its brand. Whenever the costs benefits from an acquisition outweighs the decision to start from scratch, a company will always try and complete the M&A. Always.