Slightly positive mood in the M&A market. Strategic sale of company shares gains in importance. Transaction terminations increased compared to Q1.
Munich, April 2024. The Bundesverband Merger & Acquisition gem. e.V. (BM&A) presents the results of its latest member survey. In the second quarter, a total of 68 companies took part in the survey, including consultants, corporates and SMEs. The evaluation shows, among other things, a cautiously positive view of the market in the coming months as well as a higher abandonment rate for transactions.
Readiness for corporate divestiture increases
The positive view of the development of valuations has increased – in Q1, the majority of respondents saw these as stable to declining. Now 34% of the companies surveyed have a positive outlook for the coming months. European and global M&A developments continue to be viewed optimistically. At the same time, the mood is stagnating in terms of the increase in new inquiries and positive expectations regarding project completions.
While there is a constant level of interest in acquisitions and disposals, more and more companies are considering a corporate divestiture. This development can be observed at the media company Pro-Sieben-Sat-1, for example: Handelsblatt reported that the major shareholder MFE demanded that non-core businesses such as Flaconi and Verivox be divested. “This focus on the core business reflects what is currently happening on the market,” explains BM&A CEO Jan Pörschmann. In addition to the issue of succession, the sale of companies in the secondary segment is becoming increasingly important for the respondents to the Climate Monitor when considering disposals.
More terminations due to due diligence findings
There is an upward trend in the termination of transactions: 30% of respondents in the survey stated that they had terminated ongoing negotiations prematurely. The main reason for this continues to be major differences in purchase price expectations. There has also been a sharp increase in terminations due to findings from due diligence.
Companies cite access to technologies, sales synergies and the acquisition of expertise as the main motives for successful acquisitions. From this, the association deduces that the M&A market will see exciting transactions in the coming years that are geared towards growth and further development.
An anxious look ahead
“Above all, our survey shows a slightly positive development of the M&A market from a low level,” says Pörschmann, summarizing the results. Price expectations and due diligence results are slowing down the movement somewhat. At the same time, the takeovers that have taken place indicate a willingness to invest in innovative ideas and new markets.
You can find the full analysis on the website of our publication M&A Review: Study results – Climate Monitor Q2 2024
