This past year has been a bit different from the prior year for M&A. After a record year in 2021, EMEA M&A saw a downshift in momentum in 2022. Both deal volumes and values in EMEA fell in the first three quarters of 2022 compared to the same time last year: there were 8,279 deals worth €844.9bn, a 14% drop yoy in terms of deal volume and a 16% decline in deal value (see Deal Drivers: EMEA Q3 2022).
No region has really been immune from the impact of factors including rising inflation and interest rates, the war in Ukraine, ongoing supply chain issues, rising energy prices, fluctuating exchange rates, and changes in consumer behavior. However, that doesn’t mean all is doom and gloom as we look at what lies ahead in 2023. In fact, only 10% of dealmakers at a recent webinar said they expected the outlook for M&A in Europe to be negative next year.
So, what is this optimism, or at least tempered enthusiasm, due to?
Deals in the pipeline
First, there appears to be a healthy pipeline of potential deals out there – in both sectors and regions. Datasite is seeing a 10% increase in deals launching and preparing on its platforms year-to-date, demonstrating a difference between what has been announced and what will be announced in the future. And between June 1 and November 25, 2022, there were 3,022 stories about companies coming to market in EMEA per Mergermarket data — more than last year at this time.
Sectors and sub-regions
TMT, consumer, and industrials & chemicals are expected to experience the most dealmaking in 2023 – not much of a surprise, as those sectors have been in the top five for M&A deals by volume and value across all of EMEA in 2022.
The UK & Ireland and DACH could see a high level of deals in 2023 (again, no surprise), but it might be worth keeping your eye on CEE & SEE, and Turkey, the Middle East & Africa, too, especially in TMT.
Forces to reckon with
It also looks like valuations, cost of financing, and ESG will also play a big role in driving deals in EMEA this year. And remember, private equity still has over US$1 trillion to play with – so things could well get even more interesting sooner than later.
For more insight into M&A in EMEA next year, download Deal Drivers: EMEA 2023 Outlook.
Datasite is a leading SaaS provider for the M&A industry, empowering dealmakers around the world with the tools they need to succeed across the entire deal lifecycle. For more information, visit www.datasite.com.