In Europe there has been a sharp change of opinion on M&A transactions in the last year according to what emerges from the European M&A Outlook, now in its fifth edition and published by CMS in collaboration with Mergermarket.
The report gathered the views of 230 European managers, operating in companies and private equity firms, evaluating their views on M&A operations in Europe for the next year.
Last year's survey, conducted in the aftermath of the Brexit vote, saw executives surveyed express an unprecedentedly pessimistic view of European M&A activity, with 66% expecting activity to decrease for the year to come and only 24% who expected an increase. This year's respondents show a more positive outlook. The clear majority, equal to 67%, expect an increase in the levels of European M&A activity while only 5% of those interviewed assume a slowdown.
Respondents have adjusted to a “new return to normal” in European M&A activity. The lawyer Pietro Cavasola, Partner of the Firm and Head of the Corporate M&A department of CMS in Italy, stated: “The European M&A market is showing signs of a newfound optimism and vitality towards the growth prospects for next year. The post-Brexit scenario as well as the return to economic growth in the Eurozone open up new opportunities for development in the sector. Italy is reconfirmed once again this year as an important destination for M&A operations in continuity with what was observed in 2016.”
According to Mergermarket data, the value of M&A transactions in the first half of 2017 recorded a sharp increase in value compared to the same period of the previous year, rising by a third (33%) up to 443 billion euros.
Kathleen Van Aerden, EMEA Research Manager at Mergermarket, reports: “European M&A in the first half of 2017 is showing positive signs of recovery, with momentum continuing throughout the year. The total value of €246 billion recorded in the second quarter of 2017 increased by 25% compared to the previous quarter and was higher than any quarter in 2016.”
The managers interviewed believe that the financing conditions in Europe are positive and that this will favor operations in the next twelve months. The vast majority of respondents (88%) expect similar or more favorable financing conditions over the next year.
Overseas buyers have been eyeing the European market with interest, with four of the top ten European deals in H2017 90 led by bidders located outside the EU. Respondents expect this trend to continue with 60% saying they expect an increase in the number of European M&A deals involving non-European buyers and 12% expecting value to grow over the next XNUMX months.
