Mergermarket: Benelux reached record number of M&A deals

20 januari 2020

Mergermarket, the leading provider of M&A data and intelligence, has recently published the latest Benelux M&A data. The key points are outlined below:

M&A activity in Benelux hit 837 transactions worth EUR 55.2bn, representing a 10.8% of the European M&A deal count, its highest share on record. The uptick in value was largely as a result of more big-ticket deals with 23 deals worth at least EUR 500m recorded during 2019, including EssilorLuxottica’s EUR 9.3bn takeover of GrandVision’s. These 23 deals accounted for an aggregate EUR 42.8bn, versus 11 (EUR 24.5bn) and 18 such deals (EUR 35.8bn) announced in 2018 and 2017, respectively. The Netherlands has witnessed at least 20 deals valued above EUR 250m each year in the last five years, totalling a combined EUR 149.2bn over the period.

Foreign investment into Benelux reached EUR 51.2bn across 377 transactions during FY19, recording the highest value since 2007 (EUR 163.2bn), alongside its highest number of deals on record. The four largest inbound deals of 2019 were all announced during 2H, including the acquisition of energy company Eneco, by a Japanese consortium. Japanese firms spent a total EUR 6.3bn across eleven deals, ranking as the third most active foreign investor by value whilst also signing over ten transactions into the region for the third successive year. The US was also active with a total 83 deals worth EUR 16bn announced, 22.1% higher by volume versus 2018 in contrast to a 2.3% slowdown of US dealmaking into Europe.

Luxembourg saw strong activity during 2019, with 26 transactions worth a combined EUR 4.9bn announced, compared to EUR 1bn across 28 deals in 2018. Three deals worth over EUR 500m were announced in FY19, the most since 2011 (four deals), driving M&A value to its highest value since 2014 (EUR 9.9bn). PAI Partners’ acquisition of a majority stake in Armacell International early December pinpointed the growing buyout activity in the country, with nine buyouts recorded during FY19, compared to less than five announced in each of the past three years. Meanwhile, Green Arrow Capital’s investment into Quercus Asset Selection underlined the continued interest in the financial services sector, recording ten deals in the last 12 months, only behind 2018’s record (14 deals).

2019 saw the highest number of buyouts in Benelux on record, spurred by high level of dry powder and disruptive technology across various industries. There were 180 buyouts worth a disclosed EUR 7.3bn during FY19, compared to 177 deals valued at EUR 15.7bn a year prior. The TMT sector was key to the increase, with a total 42 deals worth a disclosed EUR 606.7m. The sector accounted for 23.3% of the region’s total number of buyouts seen in 2019, up from 16.4% and 18.6% in 2018 and 2017, respectively. Private equity firms are expected to remain active the region in 2020, driven by interest in innovative assets – as seen with the investment into Dutch biotech firm AM Pharma.

The consumer sector witnessed an uptick in activity during FY19 (EUR 13.2bn, 121 deals), reaching its highest number of deals on record and second highest value since the financial crisis, following the EssilorLuxottica/GrandVision tie-up. In comparison to European consumer deals (973) which saw a 1.5% increase over 2018’s figure (959), the Benelux region registered a 22.2% rise, pushing the region’s share of European consumer M&A to its highest point on record at 12.3%. French firms were the most acquisitive foreign investors in the sector in 2019, recording 17 acquisitions into Benelux, compared to eight and five in 2018 and 2017, respectively. They were also responsible for five deals in the car dealership space in Belgium during 2019, including Groupe Maurin’s acquisition of Groep JAM and Claes & Zonen, following a wave of consolidation in France in recent years.

Olivier Gilkinet, Senior Research Analyst at Mergermarket, commented: “In contrast to wider European trends, M&A in the Benelux region went from strength to strength, reaching a record number of deals and its highest value since 2008. Foreign investment bolstered the region’s dealmaking, drawn by various corporate and tax reforms across the region, including the restructuring Dutch Scheme, the Belgian Code of Companies and Associations or the New Companies Act in Luxembourg.”