VentureCapital Magazin | Courageous Decisions Needed: Commentary on the 2024 German M&A Market

Jan 2024

Originally posted by VentureCapital Magazin on January 5, 2024.

Rising interest rates, increased energy costs, geopolitical conflicts and poor economic forecasts led to a slower German mergers and acquisitions (M&A) market last year.

While challenging conditions are likely to continue, several factors suggest that M&A will be a priority for German companies this year.

“Increasing globalization and the growing importance of digital business models are forcing many medium-sized companies to adopt bold acquisition strategies or to sell to a larger or financially strong partner,” Dr. Michael Drill, Managing Director and Head of Lincoln Germany, commented. “Shorter product and company cycles, challenges in the core business and occasionally previous major acquisitions require large German corporations to constantly review their corporate portfolio.”

Increasing pressures from shareholders, an effort to improve environmental, social and governance (ESG) ratings through M&A and aging private equity portfolios are also driving market activity.

M&A this year is expected to be a buyer’s market alongside longer processes, an uptick in cross-border transactions as well as a large proportion of deals in the mid-cap segment.

“Almost all industries will be affected by mergers and acquisitions, with the share of non-cyclical industries continuing to increase at the expense of cyclical industrial sectors,” Michael said. “We see above-average M&A activity in the areas of technology, business services and healthcare, while there is a special boom for M&A in infrastructure investments.”

View the original article.

Summary

Contributor

Meet Professionals with Complementary Expertise in Mergers & Acquisitions

Related Perspectives in Mergers & Acquisitions

Cybersecurity Report: Year-End 2023 & Q1 2024

In 2023, cybersecurity M&A activity saw a significant decline in both volume and value, reaching its lowest point since 2014, attributed to factors such as high interest rates, inflation and… Read More

Consumer, Business and Economic Trends Align to Drive New Interest in Recommerce

Back in 2021, the recommerce industry seemed to have finally hit its stride, with the sector experiencing a surge in transactions, valuations and deal sizes. At the brink of becoming… Read More

Entering the Age of the AI Economy

Artificial intelligence (AI) continues to rapidly evolve and reshape industries and how people work. AI’s ability to analyze data, identify patterns and streamline operations makes it a powerful tool that… Read More

The Fitness Investment Landscape

State of the Fitness Market: presented by L.E.K. Consulting Fitness Market Stabilization and Return to Growth Few industries were as negatively impacted by COVID-19 as the in-person fitness industry. Deemed… Read More