Welcome to the most recent edition of the Danish version of KPMG’s Nordic Deal Trend Report covering deal activity in Denmark and across the wider Nordics in the first quarter of 2023.
Diving directly into looking at the number of announced deals since turn of the year, we note that, seemingly, the activity level continues to stand around the same as in the latter half of last year with 640 announced deals in Q1 2023. Remember, that in Q3 and Q4 2022, announced deals totaled 661 and 745, respectively. The post-pandemic overdrive in M&A across our part of the world has reached a less frantic feel to it and seems to be levelling out at a slightly lower, healthier and more sustainable level.
One thing we have noted, however, is the aggregated publicly announced deal value for the first quarter across the Nordics. Publicly announced deal value totals around EUR17.7bn, where the average for the latest two quarters of last year stood at DKK28.4bn and for the first quarter of 2022, it almost hit the EUR45bn mark.
Sector breakdown by deal count Q1’23 vs. Q4’22
Apparently, mega deals happen less frequently than what we have seen over the last couple of years. Mind you though, that operating in the Nordic M&A market, this does not have a too large impact as the main part of deals fall in the mid-market segment anyway. With smaller-size deals, that are easier to get financing in place for, we expect the deal levels, looking at number of announced deals, will continue as is or perhaps, even increase slightly going into the next couple of quarters of the year.
From a sector-split perspective, everything is business as usual. Tech deals, although slightly down compared to the COVID-19 heydays, still make up almost a quarter (23%) of all announced deals. This is followed by manufacturing (18%) and services (13%) – exactly the same split as end of last year. Followed by real estate (11%) and energy and consumer markets (both at 9%), the six largest sectors total close to 85% of all deals.
Even though we seem to have been hit by one financially challenging curveball after another since the start of 2020 – most recently with the global banking system turmoil in both the US and Europe and its follow-on effect on parts of the stock market – the deals pipeline regarding Danish and Nordic assets coming to market and being carried out is still relatively strong. The prevalence of smaller to midsize deals still taking place – in essence, the type of deals being done across our part of the world – paired with the relative strength and stability of Nordic economies make me believe that the bottom will not fall out of the Nordic M&A market. For one, I will look forward to experiencing how the development of the Nordic M&A market will fare going into Q2 and Q3 of 2023.
Contact us
Dale Treloggen
Partner, Leder af Transaction Services
KPMG in Denmark
Stig Meulengracht
Partner, Transaction Services
KPMG in Denmark
Jakob Lumholtz
Manager
KPMG in Denmark
Kathryn Alexis Jörgensen
Partner, Transaction Services
KPMG in Denmark