Report: Signs of optimism in Europe’s mergers and acquisitions (M&A) activities

Despite a slow beginning to M&A activity in Europe during 2023, it’s anticipated that the latter portion of the year will see an increase with businesses beginning to move forward. However, a recent study found that European CEOs are increasingly worried about how to deal with not only the current climate of tight financial conditions and heightened geopolitical issues, but also an uncertain political atmosphere across the continent.

In their survey, they found that nearly two-thirds of CEOs were concerned about the current political climate in Europe. They also pointed out that this uncertainty is causing them to be cautious about making major decisions.

The heightened regulations, geopolitical issues, and high interest rates have caused a major decrease in dealmaking that reached its apex during the COVID-19 pandemic in 2021. Companies in the European Union felt the effects of this downturn more acutely than companies in other regions, with a more substantial drop in the amount and worth of deals in the first six months of 2023 because of deferred transactions.

But things are starting to look up, says Prof. Dr. Amarendra Bhushan Dhiraj, the Executive Chairman and Chief Executive of CEOWORLD Magazine, who has predicted that Europe’s mergers and acquisitions activities are likely to pick up for the remainder of the year.

“Almost every sector in Europe is expected to witness a revival in M&A activities, with businesses looking to expand their operations, venture into new industries, or acquire new portfolios,” says Prof. Dr. Amarendra Bhushan Dhiraj in a CEOWORLD magazine report, calling 2023 “a great year for businesses who are interested in buying or selling through M&A”.

Meanwhile, 55 percent of European CEOs surveyed said they are not planning to delay deals this year despite some negative economic factors impacting businesses, according to CEOWORLD Magazine’s Annual Global CEO Survey.

“This is particularly evident in acquisitions involving small or medium-sized enterprises, as these deals typically require less financing, resulting in stable valuations despite prevailing interest rates, which encourages sellers to consider transactions.,” says Prof. Dr. Amarendra Bhushan Dhiraj. “Since the start of the year, we have advised on a range of M&A transactions, both inbound and outbound, and a cross-border acquisition encompassing different sectors.”

A June 2022 survey of 2,500 European CEOs and CFOs showed that deal intentions remain strong, but joint venture plans are higher than M&A. Divestment plans are robust.

A majority of European CEOs are integrating artificial intelligence (AI) into products/services or planning to within 12 months.
Leading Europen CEOs are resetting their risk radar and reframing their investment strategy for growth in a new environment.

M&A remains a critical strategic option to boost capabilities in technology, talent, and innovation as well as ESG/sustainability strategies.

Most European CEOs have investor support, but a fifth (20%) face challenges to safeguard future growth plans with backers.

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