European financial services companies experienced lower levels of M&A in 2019 versus the year before both in terms of transaction volume and value, according to Mergermarket data. However, industry dealmakers are tipped to remain busy, as insurers and banks review their operations while bourses and private equity investors scout for deals.
The value of M&A in the European industrials & chemicals (I&C) sector fell 23.9% in 2019, as dealmakers looked to navigate the murky waters of a potential hard Brexit and alleviate fears of supply chain disruption caused by trade war concerns.
Energy, mining and utilities are three sectors uniquely exposed to geopolitical instability. While this creates fertile ground for smart deal making, it also disrupts the natural flow of transactions, and contributed to 2019 being one of the least active years since 2013.
Continued uncertainty over the US-China trade war, as well a mood of caution caused by the disruption of Europe’s Transport sector in the face of new technologies and regulations, created a hard landing in the second half of 2019, dealmakers told this news service. Still, there are pockets of optimism for 2020 as consolidation moves apace and low-cost opportunities arise for those with money to spend, they added.
A lack of megadeals compared to the year prior caused European TMT M&A activity to decline by 36.3% in value in 2019 to EUR 108.4bn, according to Mergermarket data. Based on deal volume, however, the region hit a record high notching up a total of 1,413 TMT deals in 2019 compared to 1,338 in 2018.
The DACH region saw a softer start to the year, experiencing a dip in deal making, yet still outpacing a subdued M&A market across Europe, according to Mergermarket's 1H19 DACH Trend Summary.
Norway sees strong inbound interest throughout a period of two halves while Danish market outlook remains optimistic despite declining activity in 1H19
M&A targeting Turkey in 2018 saw subdued activity, but despite the low number of deals, the country saw an increase of 40.4% in deal value compared to 2017.
Pablo Mayo Cerqueiro
Financial Services Correspondent, Acuris
