Market Review | Q4 2020 | Oaklins Danmark: Mid-market M&A and financial advice globally

M&A activity in Denmark and Europe rises sharply in Q4 after a turbulent start to 2020

Summary

After almost ten years of growth, Danish and European M&A activity declined in the first half of 2020 compared to previous years, due to the global COVID-19 pandemic. M&A activity in the second half of 2020, however, shows very positive signs, both in Denmark and Europe.

In Denmark, the fourth quarter of the year offered a record high level of Danish corporate sales. The figures for Q4 2020 also show that Danish companies' appetite for international acquisitions is at a historically high level. After some challenging months marked by the COVID-19 pandemic, a clear recovery can be seen in Q4, where the total number of Danish transactions hits the highest level in more than a decade.

COVID-19 initially made many financial buyers focus on the existing portfolio rather than new acquisitions, but most financial buyers are again pursuing acquisition opportunities. The share of transactions with a financial buyer amounted to 31% of Danish transactions in 2020. Looking at the overall European M&A market, the level of activity in Q4 also reflects signs of a clear recovery. The number of transactions is rising sharply, and Q4 is at a record high, partially compensating for the lower level in Q2.

The Danish M&A market enjoyed a strong finish to 2020 with a Q4 activity level well above that seen in recent years. There appears to be an element of catch-up effect, with transactions initially put on hold due to COVID-19, and now agreed in the past quarter. The European market is likewise showing clear signs of recovery, with increasing M&A activity. The transaction volume in Q4 2020 shows a promising development, which bodes well for 2021. DANIEL SAND – MANAGING PARTNER, OAKLINS DENMARK