Europe’s M&A market delivered a strong performance in the first nine months of the year with the region on track for a 20% year-over-year increase in annual deal value.
As of the end of Q3, the total stood at $803.7 billion, according to PitchBook’s Q3 2024 Global M&A Report.
At the current pace, 2024 would significantly surpass last year; although it would remain far short of 2021’s $1.4 trillion peak. Deal count, on the other hand, is on track for a record year with the total projected to reach almost 19,000 transactions.
Interest-rate cuts across Europe have improved valuations due to narrowing bid-ask spreads, leading to more deal flow and heightened buyout activity, particularly among publicly traded companies.
One of the most prominent deals in Q3 has been EQT’s acquisition of Keyword Studios for $2.7 billion in a take-private transaction. This surge in buyouts underscores an increased appetite for taking companies private, a trend driven by decreasing borrowing costs.
The largest deal of Q3 was Danish logistics giant DSV‘s agreement to acquire DB Schenker, the logistics arm of Germany’s Deutsche Bahn, for $16.4 billion.
Corporate divestitures accounted for four of the top 10 deals, with the financial services sector driving much of the activity. French insurer AXA is in discussions to sell its asset management arm, AXA Investment Managers, to BNP Paribas for $5.5 billion.
Meanwhile, UBS divested its Quantitative Investment Strategies business for $1.5 billion, and Hayfin Capital Management, a European private credit specialist, completed a $1.3 billion management buyout with backing from US-based Arctos Partners.
The European financial services sector is expected to notch more than $100 billion in M&A deal value across approximately 1,000 transactions by year-end.
Asset managers and banks are under pressure to streamline operations as they adapt to higher-for-longer interest rates, even amid a shift toward easing by central banks.
Looking ahead, the report projects a robust close to the year for European M&A. With public markets rallying, inflation under control and central banks steadily reducing interest rates, borrowing costs are falling.
This favorable environment is likely to further drive dealmaking as both PE sponsors and corporations gain the financial flexibility they need to stay competitive.
Featured image by DKosig/Getty Images
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