Munich, February 2024. The Bundesverband Mergers & Acquisitions gem. e.V. (BM&A) is now publishing a regular survey of takeover activity in Germany. In recent years, the German economy has experienced a number of setbacks, which have also affected the takeover market. Between discrepancies in value and price expectations, a decline in large-cap transactions and a general reluctance to invest, the market lost momentum. Will this trend continue in 2024 or will the market stabilise again? The BM&A's new Climate Monitor investigates this question. In collaboration with the University of Bristol, it surveyed a total of 300 association members for the first time.

Germany's economic development lags behind the European average

In the first round, 88 participating companies gave their forecast for the M&A year 2024. Despite ongoing difficulties, these were cautiously optimistic: The majority expect valuations to increase. The respondents are concerned about the economic situation: "Only 25 per cent of the study participants see a positive economic development in Germany. In contrast, most of them see the development in Europe or globally as positive," says BM&A CEO Jan Pörschmann. Nevertheless, around 70 per cent of those surveyed are currently looking at acquisitions. The main reasons for this are to strengthen their market position, acquire expertise in new areas and gain access to previously unexplored sectors and technologies. Sales are predominantly taking place in those companies that are looking for a solution for succession planning.

High interest rates slow down transaction plans

There is uncertainty in the small-cap segment, while the development of micro-transactions is assessed as stable to positive. Mid- and large-cap deals remain at an uncertain stage. Both the number and volume of deals fell sharply last year. The latter is primarily due to the high interest rate level, which makes large transactions unattractive. The CEO adds: "In general, the persistent discrepancy in purchase prices is proving to be the biggest challenge, even in 2024." On the one hand, there are sellers who are still clinging to valuations from the pre-coronavirus era, while on the other, prospective buyers fear the high prices. The expectations are likely to converge in the coming months, meaning that more deals will be finalised again.

Sentiment: No stability yet despite cautious optimism

Pörschmann summarises: "The figures will pick up, but there is still no stability that we will return to the 2021 level." Whether the mood will really improve in the coming months, the Association through further surveys. Every quarter, the Members The association collects the results in the regular M&A Climate Monitor. The association collates the results in the regularly published M&A Climate Monitor.

Detailed information on the evaluation here: M&A Climate 01/2024