Pullach, August 13, 2024 – The German Mergers & Acquisitions Association (BM&A) today published the results of the M&A Climate Monitor for the third quarter of 2024, which was conducted in collaboration with the University of Bristol. The survey of 79 companies, predominantly from the B2B sector and SMEs, shows a subdued mood in the German M&A market. Despite declining momentum overall, there are positive developments in the micro and small cap segment.
Key messages of the results
- Positive development in the micro and small cap segment: Despite the general slowdown in the German M&A market, smaller companies continue to show an optimistic mood and positive growth forecasts.
- Shift in the main motives for acquisitions: Companies are increasingly focusing on cost synergies as the primary motive for acquisitions, although strengthening their market position remains of central importance.
- Global and European economic situation more positive than in Germany: While assessments of the economic situation in Germany are declining, the companies surveyed are more optimistic about global and European developments.
Weak market momentum requires strategic impetus
“Especially in times when the M&A business is rather weak, we as an association are trying to provide a lot of impetus, success stories and suggestions so that the strategic-transformative power of M&A is perceived more at the management levels of the soul of the German economy – among SMEs,” explains Jan Pörschmann, Chairman of the BM&A Board.
Different developments in different market segments
The survey results show that sentiment in the micro and small-cap sector is positive, while the outlook in the large-cap sector is gloomy for the third quarter in a row. In Q3, 25.3% of companies canceled transactions, mainly due to due diligence findings and diverging purchase price expectations.
Economic situation and valuation trends
The economic situation is viewed more positively globally and in Europe than in Germany. Compared to Q2, only 21.5% of respondents still see a slightly positive economic development in Germany, while 48.1% expect a positive global development. Company valuations are also assessed more cautiously than in previous quarters.
Motives for purchases and sales are changing
The main motives for acquisitions have shifted towards cost synergies, while strengthening the market position remains the most important motive. “It is clear that companies are taking a strategic approach and paying more attention to cost synergies in order to remain competitive in an uncertain economic environment,” continues Pörschmann. Succession and growth remain the main reasons for disposals, with traditional corporate divestitures also playing a role.
Success factors and strategic priorities
“Our aim is to strengthen German SMEs by providing targeted information and best practices in the M&A sector. Especially in challenging times, it is important that companies recognize the opportunities and use them strategically,” emphasizes Pörschmann. BM&A will continue to work on communicating the transformative power of M&A and supporting companies in their growth strategies.
The full analysis can be found on the website of our publication M&A Review:
Study results – Climate Monitor Q3 2024
