CMS European M&A Outlook 2020

22 September 2020

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Mergermarket is pleased to present Who dares wins: European M&A Outlook 2020, published in association with CMS. This report provides invaluable insights into the M&A landscape in Europe in 2020, and the opportunities and challenges facing dealmakers.
 
Highlights from the report include:
 
  • M&A appetite weakens. 74% of respondents say the pandemic has caused their dealmaking appetite to lessen. 65% of respondents are not considering M&A, against 45% in last year’s survey. Uncertainty around future company earnings has widened pricing expectations between vendors and buyers. Dealmakers are nervous about paying full multiples for assets at a time of high volatility, while vendors are reluctant to crystallise lower valuations at the bottom of the cycle.
  • Financing conditions to tighten. 79% of respondents expect financing conditions to become more trying in the coming year. Leveraged loan issuance is down year on year and, although corporates have been able to tap high-yield bond markets, lenders are focused on nursing current portfolios through COVID-19 disruption rather than funding new transactions.
  • Distressed M&A, restructuring and corporate defaults to rise. All respondents anticipate an increase in distressed M&A, 90% say there will be an increase in restructuring activity, and 82% expect an increase in corporate defaults. Almost three-quarters of cash-rich private equity firms noted their interest in distressed and turnaround opportunities, signalling that prospects remain for those brave enough to embrace both the challenges and the opportunities found in this period of instability.