Five out of six major Nordic corporations anticipating M&A activity
For the coming year the largest Nordic corporations expect a similar level of M&A as during the last twelve months with an increased appetite for transactions above €500m.
For the sixth consecutive year, Linklaters instructed TNS SIFO, a leading market research company, to conduct a survey on Mergers and Acquisitions (M&A) among the largest listed companies. The results provide valuable insights into the M&A climate and attitudes of the key decision-makers among these listed corporations.
Whilst the results of the survey resonated the relatively strong M&A activity of the last 12 months, it also made clear that a more prudent growth in M&A activity is to be expected next year. The increased expectations of a growth in M&A activity that started in 2010 and continued throughout 2011 has been reversed. Only 5% of the participating companies expected considerably more M&A activity in the next 12 months vs. the last 12 months. The corresponding figure in the survey last year was 21%.
Still, more than 5 out of 6 of the largest Nordic public companies plan some form of M&A activity in the coming 12 months, which is well above the levels of anticipated M&A in the surveys from 2008 to 2010. The overall value of M&A deals is generally expected to be stable or increase slightly. A significant uptick is however noted among the number of companies considering transactions above €500m.
The uncertain financial climate remains an obstacle, with more companies reporting postponement of large projects and delays in deals to come to a close. When looking at the main drivers behind acquisition strategy, there was a remarkable shift from last year’s focus on developing new markets to a focus on increasing revenues, and complementing existing product portfolios.
Fredrik Lindqvist, Head of Corporate and M&A of Linklaters Stockholm office:
“Throughout the last 12 months, Linklaters has worked on several big ticket M&A deals in the Nordic market. Large listed companies are clearly less affected by the on-going market turmoil than the financial players. This survey indicates that companies will continue to do transactions and we do expect well-targeted strategic deals to continue to happen. In a low-growth environment, companies will seek expansion through acquisitions in their core markets and seize opportunities when they arise”.
For further information and access to the full report, please contact:
Fredrik Lindqvist, Head of M&A Linklaters Stockholm, 08 665 6621, fredrik.lindqvist@linklaters.com
Casper Wrede, Business Development Advisor, Linklaters Stockholm, 08 665 4137, casper.wrede@linklaters.com
The survey was conducted during the second half of March 2012 by TNS SIFO. The sample consisted of 131 of the largest publically listed companies in Sweden, Denmark, Finland and Norway. All participating companies belong to the Nordic Large Cap list on the OMX Stock Exchange (market capitalization above 1 billion Euro) or the Oslo Stock Exchange (market capitalization above 10 billion NOK). The response rate was 50% which is to be considered very good given the difficulties in reaching the relevant executives.
