Turning the Corner? CMS European M&A Outlook 2024

The report offers a comprehensive assessment of dealmaking sentiment in Europe’s M&A market and reflects the opinions of 330 corporates and PE firms based in Europe, the Americas and APAC about their expectations for the year ahead.

M&A activity in Europe this year has been entangled in higher inflation, rising interest rates and an uncertain economic outlook. Against this backdrop, projections for M&A over the coming 12 months are undoubtedly mixed. Yet the vast majority of respondents to our survey anticipate engaging in M&A over the coming period, suggesting a healthy volume of activity in the near term. And, as valuations appear to have stabilised over the course of 2023, the stage looks set for a meeting of minds between buyers and sellers over the medium term – at which point M&A may well start truly turning a corner.

Key findings of the report include:

• M&A expectations have moderated and diverged: dealmakers are showing greater hesitance overall about the prospects for European M&A than at this point last year, but views are undeniably mixed and a divergence has emerged between PE dealmakers and their corporate counterparts.
• Macro backdrop weighs on dealmakers: respondents cite inflationary pressures and underlying economic weakness as key challenges to financing acquisitions over the next 12 months.
• ESG scrutiny will create new deal opportunities: whilst respondents expect ESG scrutiny in M&A deals to increase, they believe ESG regulation will ultimately boost dealmaking in Europe.
• Undervalued targets and turnaround opportunities: dealmakers cite these amongst the primary catalysts driving M&A activity in Europe for the coming year.
• Digitalisation and the energy transition will drive activity: dealmakers predict the TMT and Energy sectors will experience the most significant surge in dealmaking across Europe.
• Regional prospects have changed: expectations for M&A across the different regions of Europe have shifted considerably from last year.