M&A Barometer - Q1'2011
Deloitte Financial Advisory Services
Belgian M&A Barometer, a new quarterly industry letter developed by Deloitte Financial Advisory Services, addresses the most recent trends and changes in Belgian M&A activity by highlighting a.o. the number of transactions, the involvement of private equity players versus corporates, the weight of inbound versus outbound investments, important industry trends, and other key developments which affect the Belgian M&A landscape.
Although not back at pre-crisis levels, Belgian Q1’11 M&A activity shows a strong rebound compared to low activity in 2009 and 2010. Not surprisingly, economic conditions have a significant impact on M&A activities. The economic downturn of 2008 and 2009 significantly reduced Belgian M&A activity through out the last two years. Similar trends were observed worldwide. Main rationale are lower availability of financing combined with an increased risk aversion. Also, where possible, several corporates and PE players delayed possible divestments in view of the overall market sentiment of decreased deal multiples, hence further reducing deal flow.
While 2008 level (at 274 announced deals) already showed a 16.5% decline compared to record year 2007 (328 transactions), the full impact of the crisis was fully visible during 2009. That year, Belgian M&A market declined to only 179 transactions, representing a 35% decrease compared to 2008 and almost half (-45%) of 2007 level. This trend continued throughout the first half of 2010, with Q1'10 recording the lowest quarterly M&A activity level since years, at only 36 transactions.