Market Review Q3 2020

European and Danish M&A activity remarkably strong despite COVID-19 uncertainty

Resumé

After almost ten years of growth, Danish and European M&A activity has been declining in the first half of 2020 compared to previous years, due to the global COVID-19 pandemic. The transaction volume in Q3, however, show positive signs both in Denmark and Europe.

The Danish M&A market enjoyed a relatively strong start to the second half of 2020 with a Q3 activity level in line with 2018 and 2019. Total transaction numbers are on par with the level of the previous two years' third quarters, despite the uncertainty implied by the COVID-19 pandemic. The constituents of the overall level of activity are the following: A relatively high number of Danish targets with almost half derived from cross-border transactions. Meanwhile, Danish companies have a continuously high appetite for international acquisitions; a trend that has remained stable during the COVID-19 pandemic. Finally, sales of Danish-owned, foreign companies are following the solid trend steering towards the highest full-year level since 2014. Among the acquired Danish companies, especially the technology sector was active, making up 30% of all transactions.

Looking at the overall European M&A market, the level of activity in Q3 also reflects a remarkable recovery. The volume of transactions is increasing, but still not on par with the third quarters of recent years.

Following a slowdown in the beginning of the COVID-19 pandemic, we are now seeing an increasing appetite for transactions from both buyers and sellers. Buyers are very aware of the continuing uncertainty in the market, but show a willingness to overcome this in order to complete the right transactions. DANIEL SAND – MANAGING PARTNER, OAKLINS DENMARK