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Deal Drivers: EMEA FY 2023

Mid-cap market keeps activity humming along

It’s been quite the ride in Europe over the past year. Official figures show the eurozone annual inflation rate was 2.9% in December, down from an excruciating 10.6% little more than a year earlier. This has offered some much-needed relief for consumers and succor for investors waiting for the European Central Bank to change its course.

High interest rates have clipped growth in Europe, which accounts for the lion’s share of EMEA deal activity. The US economy roared back to life in the third quarter, but the euro area’s GDP limped along at a snail’s pace of just 0.1% and forecasts suggest 0.6% for the year.

M&A activity was always going to be difficult in this environment. Like the rest of the world, EMEA, which is led by Europe, witnessed a pull-back in M&A. The region stands out for having the softest year-on-year aggregate value performance of any regional market.

Strength in numbers

Far more encouraging is the fact that value has been tracking upwards since Q1 of last year when it sank to a low only US$8bn above that of the COVID crash in the second quarter of 2020.

Another cause for celebration is the fact that deal volume has been humming along with considerable momentum and looks to have found a floor over the second half of 2023.

EMEA, in fact, had the best relative performance for deal count of any region. This is testament to the strength of the mid-market. Deals in this range have been thriving as buyers set their sights lower, finding comfort in the ability to tap more readily available debt financing and flying under the radar of competition regulators.

Published in association with Datasite, Deal Drivers EMEA provides an in-depth review of M&A activity in 2023, as well as an outlook for the year ahead.

The report is also available on datasite.com.