Deal Activity Update
COVID-19 has a major impact on the M&A market.
The M&A market in H1 2020
The global M&A market has been significantly impacted by the outbreak of COVID-19. This is concluded based on semi-annual research by KPMG on the developments of the global M&A market.
Significant decrease in deal volume
The global M&A market has been significantly impacted by the outbreak of COVID-19, with global monthly deal volume decreasing by 45% from December 2019 till June 2020. The Netherlands are no exception to the rule, showing a decrease of 50% during the same period. A clear distinction can be observed during H1 2020, with the majority of deals taking place until mid-March, followed by very little activity until May, and first small increases in number of deals in June.
Stable valuations and less sizable transactions
Surprisingly, price levels have remained stable during H1 2020, which could be explained by the relatively long lead time of 3 - 6 months before a transaction is executed and announced. In the Netherlands, there were 4 transactions with a deal value of €1bn or more in H1 2020, compared to 16 transactions in this size category during 2019.
M&A activity not influenced by country regulations
The various ways in which different governments in Europe responded to the COVID-19 outbreak did not seem to result in a significantly different effect on local M&A deal activity. Since Q4 2019 a downward trend in the number of deals could already be observed, which was accelerated by the outbreak of COVID-19.
Deal resilience varies strongly between sectors
Contrary to the overall M&A market and despite COVID-19, the number of telecom deals has significantly increased during the outbreak, which might be a reflection of the accelerated embracement of telecom as a key ingredient for the new way of working and economy. On the other hand, transactions in the leisure sector showed a sharp decline over the same period.
Leading M&A Advisor
KPMG Deals consistently ranks as the number one M&A advisor globally. KPMG Deals completed almost 600 deals in 2019 cementing its global number 1 position. KPMG firms operate in 87 countries with over 8,400 Deals professionals who are able to meet the needs of clients across the globe.
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