By denting boardroom confidence and ravaging balance sheets, the coronavirus crisis brought a multi-year deal-making boom to a halt; Global M&A activity has plunged 43% this year while global private equity buyouts are down 27%, Refinitiv data shows.
But European M&A activity is bucking the trend with a 12% rise, thanks to some mega-deals such as a 24 billion-pound merger of mobile operators O2 and Virgin Media.
True, the number of announced transactions is 33% below year-ago levels, but bankers see this changing as private equity funds sniff around for troubled businesses in need of cash injections or for resilient listed firms.
A consortium of KKR, Cinven and Providence has just launched a 2.96 billion-euro bid for Spanish telecoms operator MasMovil — Europe’s first take-private attempt since the crisis struck. CVC Capital Partners is in talks with Italy’s Serie A to invest up to 2.2 billion euros into the soccer league’s broadcasting rights business, sources say.
Expect more deals if market confidence continues to build.