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Summary of Nordic M&A in 2016

An overview of key statistics and trends in the Nordic mergers and acquisitions environment, both domestically and internationally.

With a rapid Q1 and Q2 start, the Nordic region needed a strong Q4 to show the growth investors would want to see.   Fortunately enough, they posted a Q4 that succeeded in the end: €14.6bn on 287 deals.  This resulted in a year-end value growth of 16%. However, this underemphasizes the 51% decrease in Q3 after a Q1-2 that earned €35.7bn, 60.7% of the years ending total.  Contribution to these stats was not uniform over 2016, as it rarely ever is, with each country experiencing their own effects on its market.

Norway

Norway suffered at the hands of the drop in oil prices, as most fringe-level oil-producing countries do, as they take revenue hits attempting to compete with the giant OPEC countries.   This forced a shift in investment focuses in Norway, and the software industry experienced the fruit of that effect.  Chinese acquisition of the Norwegian software firm Opera was the main driver in this sector at €1.1bn, also standing as the largest deal in Norway.  Another area that could see future investment is government backed industries, most notably railway systems, according to Mergermarket intelligence.

Sweden

Sweden accounted for the largest contributor to deal value and count in the Nordic region in 2016. This is in some part due to a huge Q1 valuing €11.4 billion, making up 68.75% of the total value of the deals in Q1.  The largest deal in the region this year was Mylan’s €8.8bn acquisition of the pharmaceutical company Meda in February.  Mergermarket intelligence suggests that although Q2-4 didn’t measure up to Q1, investing in Swedish business should continue to increase as the Swedish krona loses value to the euro, which could attract foreign investors.  This is combined with an already strong in-country M&A environment.  A strong 2016 is a good sign for Swedish business considering that they took the hardest hit as a result of the 2008 financial crisis.

Denmark

Unlike the rest of the Nordic region, dealmaking in Denmark dropped 42% between Q1-Q3.  Despite this, it was still had the highest private equity activity in the region, with 3 of the 5 largest private equity deals.  Many thought that lower interest rates in the fourth quarter would enhance investing, but Denmark only posted a €1.9bn value for all of its deals in the quarter. 

Finland

Despite battling sluggish economic growth and high unemployment rates, investments in Finnish business was 2nd amongst Nordic countries in 2016.  This may seem to be a surprise as its €12.9bn in total value is a 258% increase over 2015. However, the 2016 total is still less than 2013 and about equal to 2014.   This is showing 2016 to be more of a return to form than a huge leap in investing.  Finland also reflected the rest of the Nordic countries with a weak Q3, down 92%.   It also had astronomical Q2 success with €8.7 billion in deals, leading to a Q1-3 growth of 480% over 2015. 

Overall the Nordic market is showing relatively steady growth.   The number of deals in the region has continuously gone up, whereas the value of those deals has not been so linear.  That being said, the values have had a steady climb over the last 6 years, rising and falling and rising again to a total increase in the neighbourhood of €450bn since 2010.  Hopefully higher deal counts with an increase in average value will occur again in 2017.    Many of these trends will be discussed in further detail at the Nordic M&A and Private Equity Forum taking place on 23 March 2017 in Stockholm, for more information visit the event website here.

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