Difficult economic situation makes environment for company takeovers more difficult
Published: Wednesday, Dec 13th 2023, 10:00
Updated At: Thursday, Dec 14th 2023, 00:59
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The current challenging economic situation is also leaving its mark on the market for company takeovers. According to a study by management consultants Oaklins, experts expect fewer transactions in the coming twelve months.
The "Oaklins M&A Index" published on Wednesday fell to 85 points, its third-lowest level since the survey began in January 2015. At the middle of the year, the index was still at 99 points. Around 100 mergers and acquisitions (M&A) experts and decision-makers from the Swiss economy took part in the survey.
Confidence in economic development in particular has suffered against the backdrop of the various economic and geopolitical crises, according to the survey. Only 16 percent of respondents still expected the economy to be good or fairly good over the next twelve months. In June, the figure was still 34 percent.
Opportunities for buyers
It is difficult for sellers in this environment. On the other hand, prospective buyers who are able to act anti-cyclically have opportunities for lower prices and less bidding competition, according to the experts. 62% of survey participants stated that they intend to make a takeover in the next twelve months. Many of these transactions are likely to take place in the course of succession planning.
However, price expectations often diverge. The majority of respondents expect prices for takeovers to fall. However, some expect many sellers to hold on to higher prices and transaction processes to take longer. In addition, the availability of debt capital is considered to be worse than ever since the survey began.
The Oaklins M&A Index is based on a semi-annual survey of M&A experts and decision-makers in the Swiss economy. The survey covers both listed companies and SMEs across various sectors.
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