M&A Outlook in France for Q2 2021 Looks Bright
Activity is up. Tech and Healthcare are sectors to watch.
2 March 2021
Despite a very challenging 2020, we’re seeing some positive trends emerging this quarter in France. After a focus on their core businesses over the past few months, CAC 40 companies are preparing for sell-side efforts this year. Organizations like Engie SA have plans in the works to divest some services businesses, for example. Veolia’s takeover of rival wastewater and management firm Suez could likely conclude over the next few months. In short: The bankers are busy, deal flow is high and IBD accounts are heads-down on some large deals.
All of this activity is underway although many of the hurdles we saw six months ago are still in place. The majority of due diligence is still being done remotely and those processes are often taking longer — due largely to buyers’ increased scrutiny. We’re also seeing widespread disagreement between buyers and sellers on asset valuations. There is a big gap between industries.
Putting dry powder to work
However, great assets do not stay long on the market and we’ve noticed an uptick in preemptive deals as private equity (PE) firms exert pressure. Due in part to the shortage of objectively attractive assets, the competition between banks remains fierce.
A few specific industries have emerged as the ones to watch. Technology, Media, and Telecom (TMT) is an obvious one, as more organizations work toward the digitalization of processes. Energy — specifically, Renewables — offers even more opportunity. Infrastructure and Healthcare are booming as Life Sciences takes center stage and the retirement housing market experiences consolidation. All eyes are also on the banking sector, which may be prone to consolidation as well. Real Estate is also poised to be big as vaccine rollouts allow more spaces to reopen, corporations rethink their office allocations, and development plans move beyond 2020 delays.
Busy time for dealmaking
Overall, we’re seeing a lot of activity in France across multiple sectors. Clients are increasingly busy and executing a growing number of deals. With many corporations now in the starting blocks to execute their new strategic plans, bankers are expecting a very strong 2021 in terms of M&A.
For more insights into the French markets in 2021, as well as other regions all over the world, check out our detailed predictions in the Q2 2021 SS&C Intralinks Deal Flow Predictor. Independently verified as a highly accurate six-month forecast of merger and acquisition (M&A) activity, the report is compiled by tracking early-stage M&A transactions that are in preparation or have begun due diligence globally.