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European M&A activity to fall from $567bn in 2019 to $427bn in 2020, a 25% decline

Wednesday, October 16, 2019

Laxman Pai, Opalesque Asia:

A study predicts that the European M&A activity is expected to fall from $567 billion in 2019 to $427 billion in 2020, a 25% decline.

Many factors have impacted European deal activity, including the slowdown in global trade, Germany's economic slowdown, and of course, the constant uncertainty of Brexit, according to a new report by Baker McKenzie.

There is a notable decreased appetite for acquisitions, and to make matters worse, European governments have increased regulatory scrutiny significantly in 2019, said the firm's fifth annual Global Transactions Forecast, produced in conjunction with Oxford Economics.

The same holds true for the equity markets, as many European companies were reluctant to move forward with IPOs in 2019, as IPO value dropped 60% from 2018 to $15 billion.

"We see activity picking up in 2021, but concerns about a no-deal Brexit and potential trade issues between the EU and US potentially hurting a future recovery," said the report.

"Global IPO activity has been slow overall this year with significant political issues weighing on markets. There were bright spots, including in the domestic US market, which outperformed its 2018 totals," said Koen Vanhaerents, Global Chair of the Capital Markets practice.

"We're in for a turbulent 2020, but the appetite is still there for capital raising, and the pipeline, particularly in North America is quite robust. There is a light at the end of the tunnel in 2021, wit......................

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