COVID vs. M

The year 2020 had it all: The global pandemic has a firm grip on large parts of the economy. The effects of the outbreak continue to persist even a year later. Worldwide containment efforts have led to significant restrictions. Any measures, such as quarantines and border closures, have affected the entire global economy. The negative economic consequences of this development are considerable, including the disruption of global supply chains and a weakened demand for goods and services.

The COVID year 2020 also left its mark on the M market. Compared to 2019, the number of transactions on the German M market fell by almost a third in the first two quarters of 2020. However, after a gradual easing of the measures, the market began to recover. The last quarter provided a surprising turn, with over 20% more acquisitions than a year earlier. Looking more closely at the transactions that took place in that year, it is clear that the technology, media and telecommunications sectors are the frontrunners in M activity. There is no doubt that the outbreak of COVID-19 has significantly accelerated the progressive digitalization and has therefore caused a lot of excitement in the M market. With a decline of approx. 50%, the automotive and retail sectors are among the losers of this development. The total volume of all deals with German participation in 2020 was approximately 180 billion euros.

How will it continue to develop?

Despite various approvals of promising vaccines, the year 2021 will also be marked by the global pandemic. Accordingly, an increasing number of transactions are expected, particularly in the restructuring and insolvency sectors. Low interest rates and high liquidity among financial investors should additionally boost the deal market in 2021. The development therefore remains exciting.

We – the team of starkpartners – will be happy to advise you! You can reach us by telephone on 02150 7058 210, by e-mail at mergers@starkpartners.de  or on the web at www.starkpartners.de

Our solutions are always adapted to the interests of the main stakeholders. Be it in times of crisis as a “fire sale” or, of course, in classic succession arrangements of highly profitable companies.