Elke Janssens, a partner in our Corporate & Finance practice, was recently interviewed by Trends, the Belgian business and finance weekly, about the expected impact of the Covid-19 crisis on the takeover market.
According to a recent study by Vlerick, the Belgian mergers and acquisitions market was relatively stable in 2019. The expectations are less positive for 2020. Due to the Covid-19 crisis, M&A activity is expected to decline by more than 30%, and many Belgian experts expect prices to drop by more than 10%.
In the article, Elke Janssens states that many companies will be forced to sell and foresees a wave of reorganisations as of September. In her words, "support measures have been taken by the government for companies. However it's not easy for companies to make use of them since government guarantees have to pass through the bank and certain conditions must be met, such as a post-coronavirus crisis business plan which may imply shutting down a branch or selling a subsidiary".
There will however still be many opportunities for private equity firms, which will be amongst the first to take steps to restart the takeover market. Solid companies with an online model or online potential will become more interesting for private equity investors, while companies active in less impacted sectors, such as life sciences and tech, will have a competitive advantage.
The full article is available here (in Dutch).