With a 43% decline in the first quarter compared to 2022, corporate takeovers are having a difficult start to the year, according to a report.
By Le Figaro with AFP
Posted update
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The operations of takeover of companies including French players got off to their worst start to a year in four years in 2023, as the market continued to slow following first hitting the brakes in 2022, according to a report on Wednesday.
The amounts of mergers and acquisitions transactions including at least one French company fell by 43% in the first quarter of 2023 compared to the same period of the previous year to settle at 30.7 billion dollars, according to the final report. from financial data specialist Refinitiv. This is the weakest first quarter since 2019, according to this study. Mergers and acquisitions of French players to foreign companies fell by 58%, once more to their lowest since 2019.
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Mergers and acquisitions had come close to $300 billion in 2021, the highest since 2006 with the post-Covid-19 economic recovery and the period of very low interest rates. But the rise in rates orchestrated by central banks for more than a year in order to fight inflation has limited companies’ room for maneuver and the momentum had waned from the middle of 2022.
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“The noises of recession have only grown louder”
The most significant operation identified is the merger of the French company Webhelp, controlled by Groupe Bruxelles Lambert (GBL) with its American competitor Concentrix to create “a global leader in customer experience“, able to compete with the giant Teleperformance call centers. Exclusive negotiations are underway, and value Webhelp at 4.4 billion euros, also subject to the authorization of the regulatory authorities.
The arrival of investors in the capital of the investment bank Rothschild or other players within the group of retirement homes Orpea also occupied the life of companies during the first quarter. Globally, the quarter was the least active since the second quarter of 2020, in the midst of the containments put in place in the face of Covid-19, according to data from the company Dealogic. The value of transactions fell by half over one year.
«Rumors of recession have only grown louder, the world’s major central banks have continued to raise policy rates to rein in stubbornly high inflation, and some of the biggest bank failures since the Great Financial Crisis of 2008-2009 have shaken global marketssummed up the analysts.