Pullach, November 13, 2024 – The German M&A Association (BM&A) has published the latest results of its Climate Monitor for the fourth quarter of 2024, which was conducted in collaboration with the University of Bristol. The study results paint a challenging picture for the M&A market, especially in Germany, and reflect the uncertainty that many companies are facing.
Key messages of the results
- The mood in the German M&A market remains tense in view of the economic uncertainties.
- Only 18.1% of respondents still see positive economic development in Germany, in contrast to higher estimates in Europe (22.2%) and globally (39.9%).
- Despite the challenges, the micro and small cap sector continues to show a slightly positive trend, while the large cap sector is experiencing a deterioration in sentiment for the fourth quarter in a row.
- The most important motives for acquisitions are to strengthen the market position and acquire expertise.
- Succession planning and strategic realignment are key drivers for company sales.
- Around 35% of the companies surveyed canceled planned transactions in the fourth quarter, often due to different purchase price expectations and unexpected operating declines.
“We are currently experiencing an extremely difficult market environment in which economic uncertainty and strategic realignment are key challenges,” explains Jan Pörschmann, CEO of BM&A. “The declining positive assessment of economic development in Germany shows that companies are increasingly taking a more cautious approach and, above all, want to strengthen their market position.”
The BM&A Climate Monitor shows that sentiment in the large cap sector is gloomy for the fourth quarter in a row. At the same time, the micro and small cap sector continues to see slightly positive developments despite the challenges. Compared to Q3, only 18.1% of those surveyed still rate the economic development in Germany as positive – a significant decline compared to the previous quarters.
“The top motives for company acquisitions continue to be the strengthening of market position and the acquisition of expertise. At the same time, succession planning and strategic realignment are increasingly driving sales,” Pörschmann continues.
One notable result of the current Climate Monitor is the increased number of transaction cancellations in the fourth quarter. Around 35% of the companies surveyed canceled a planned transaction, with diverging purchase price expectations and unexpected slumps in operating business being the main reasons.
“This development shows that many transactions are suffering under the pressure of an uncertain economic situation and high expectations of valuation developments. The market is reacting sensitively to changes, and these uncertainties are also reflected in the increased abandonment rates,” comments Pörschmann.
The results of the BM&A Climate Monitor for the fourth quarter of 2024 emphasize the need to react flexibly to economic challenges and make strategically sound decisions in order to secure market position in a volatile environment.
You can find the full evaluation here: Study results – Climate Monitor Q4 2024
