The return of boardroom optimism

Welcome to the autumn edition of KPMG’s Nordic Deal Trend Report with figures covering deal activity in the third quarter of 2021.

We continuously note that M&A activity across key regions, including the wider EMEA region and, in particular, across the Nordics has been on an upward trajectory over the last four quarters. With 417 announced deals in the third quarter alone (1,651 deals in total this year), the activity has surpassed all prior years covered in this report – interestingly, we are even yet to witness what the fourth and final quarter of 2021 has in store for us.

Looking into the sector characteristics of the third quarter, nothing much has changed compared with the first half of the year – apart from the fact that deal activity levels seem increasingly fast paced. The tech, consumer and industrial manufacturing sectors clearly still take top spots, actually even cementing their position and making up almost three quarters of total announced deals in the months of July to September.

Sector breakdown Q3'21 (outer ring) vs. Q3'20 (center ring)
donut chart

As touched upon in our two most recent reports, we note the sentiment of doing deals in the transformational digital technology and e-commerce platforms in the context of societies is slowly getting used to the ‘new normal’ following COVID-19 and lockdown periods. No doubt this has, partly, driven the appetite for making deals happen in the two largest sectors.

This combined with the fact that across the Nordics there have been a high level of resilience against the pandemic and a will to take necessary measures to re-open societies, together with plenty of corporate cash and private equity dry powder, we do not see any signs why M&A appetite should deteriorate in the near future.

Also underpinning the signs of continued high deal levels is KPMG’s CEO Outlook 2021 that we released recently. Drawing on the perspectives of 1,325 CEOs across 11 major markets, the survey offers a lens on how today’s CEOs are plugged-in, people-first and purpose-led.

One of the overall themes that emerged in the CEO Outlook report – the road to renewal – shows that despite continued uncertainty and risk volatility, CEOs are confident and optimistic about future growth and are looking to drive expansion. 87 percent of CEOs are confident in their own company’s growth prospects where M&A appears to be critical to powering this growth and state that they are looking to make deals in the next three years. Among that number, 50 percent characterise their M&A appetite as being ‘high’.

One could go as far as saying that optimism has returned to the boardrooms.

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