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M&A Transactions 2008 / 2009 / 2010 - Review, Analysis & Key Trends
Last year Taxand Germany analysed 150 transactions which they had advised on and that took place one year before and one year after the Lehman collapse on the 15 September 2008. The results of the analysis were published in a study. One year later, and to complement the original report, Taxand Germany has now analysed 157 transactions they advised on and that took place one year before and one year after the first anniversary of the Lehman collapse, 15 September 2009. Taxand Germany detail their findings and particularly that the year-on-year comparison has yeilded interesting results for M&A showing that the transaction market is becoming more stable, healthcare and energy have been the most successful sectors and trends are pointing towards larger sized transactions with the average duration of a transaction decreasing proportionally.
The study analyses each transaction within the given time period, focussing on separate industries and the particular characteristics of each transaction, for example the duration of a transaction and in particular the reasons for the failure of a transaction. This study does not refer to publicly available data, only Taxand Germany's exclusive insider knowledge of the transactions that have been analysed.
The insights gained from this year's study confirm the general perception that the M&A market has recovered, but in more detail additionally identifies various opportunities and also potential risks which businesses should watch out for. The folllwing conclusions mean we can start to gain an insight into one's own actions in a transaction, our role in transactions and subsequent impacts for the M&A.
- The analysis of the 157 transactions dealt with by Luther during the period 15 September 2008 to 15 September 2010 shows that the transaction market is becoming more stable. As a result of the improved economic situation in Germany, transaction security in relation to a successful completion of a transaction, has increased, even if the number of transactions was far below the relevant number of transactions before the Lehman collapse. The debt crisis in Greece has left its mark on the first quarter of 2010. However, the transaction market has managed to sustain itself again very quickly.
- The two most successful sectors in the transaction market were the healthcare sector and the energy sector. The growth driver in the healthcare sector is the increased consolidation pressure in a fragmented market. The energy sector showed a stronger tendency towards investing in the renewable energy business. The classic industries, such as the basic materials industry, the automotive and the engineering industries remain stable. However, during the research period, these industries were characterised by opportunity purchases and supportive investment and the respective sectors have consequently developed heterogeneously.
- The positive general mood in the transaction market is reflected in the transaction sizes. Whereas 2008 and 2009 were defined by lots of small-size transactions, the trend in 2009 and 2010 tended towards large-size transactions. We noticed an increase in confidence in the economic environment and the successful implementation of strategic goals. Also, the shorter duration of transactions indicates a stabilisation of the M&A market. At the same time as confidence in a stable economy has increased, the average duration of a transaction has decreased from 5.2 months to 4.8 months.
- Any doubts on the stabilisation of the M&A market have been dispelled by our analysis of the reasons for transaction failure. A large number of transactions in 2008 and 2009 were discontinued or not completed as a result of a hazy economic environment. In 2009 and 2010 the reason why many transactions failed was due mainly to differing purchase price expectations, indicating a strong market for sellers.
Your Taxand contact for further queries is:
Dr. Markus Schackmann
T. +49 211 5660 18792
Download the full study from Taxand Germany here: