PwC Belgium presents insights from Recent Trends in M&A Survey at key event…
On Wednesday, September 25, PwC Belgium hosted its ‘Recent Trends in M&A’ event, gathering dealmakers, investors, CEOs, and CFOs to discuss the latest insights from PwC's M&A Trend Survey. The event, which highlighted the evolving dynamics of mergers and acquisitions in the Belgian market, provided a platform for corporate and financial buyers to share their experiences and perspectives.
Nancy De Beule, Partner in Mergers & Acquisitions at PwC Belgium, opened the evening by sharing her passion for the industry and outlining the agenda. "I've been active in M&A for more than 20 years. My main focus is tax, but M&A is also my passion. It fascinates me because there’s always something to say, always something to do in this field", she remarked.
She further emphasized that the event aimed to highlight major trends shaping the M&A landscape, while providing attendees with a detailed M&A survey booklet for more comprehensive insights. It is the third edition of the research, so comparisons can be made with previous years.
In the presentation, De Beule underscored the need for businesses to adapt in the face of significant global challenges, including digital transformation, energy disruption, and economic shifts. She set the tone for the discussion with a thought-provoking quote from Barack Obama: “Change will not come if we wait for another person or another time. We are the change that we seek.” According to De Beule, this sentiment aptly reflects the current climate where businesses must act decisively to stay relevant.
Carve-outs and business transformation lead the trends
One of the standout trends from the survey was the rising prevalence of carve-outs. "We saw a lot of carve-outs", said De Beule. "42 percent of corporates are either in the process of or planning a carve-out. Companies are realizing that in the face of tech disruptions, climate concerns, and inflation, certain parts of their businesses, once core, are no longer as crucial. They are selling these units to free up capital for future investments."
She also highlighted that private equity firms, often drawn to the growth potential in these complex deals, are eagerly acquiring these carved-out businesses.
Private equity's shift to exits
De Beule also pointed out that 2024 has been a year of exits for private equity. "It was an exit year, and there was a significant focus on portfolio companies. Compared to 2021, where we saw a balance of buying and selling, this year, 60 percent of private equity respondents made more exits than acquisitions", she explained. While there were fewer acquisitions, this focus on exits signals a maturing strategy in the private equity space as firms concentrate on adding value to their existing investments.
Family businesses embrace collaboration with private investors
One surprising insight from the survey was the increased willingness of family businesses to partner with financial investors. "In our first survey, the answer was a clear ‘no’ when we asked family businesses if they would consider co-investing with private investors. This year, that number has jumped to 31 percent", De Beule noted.
She outlined several reasons for this shift: "One reason is that they want to leverage the expertise of financial investors to build an M&A pipeline, facilitate acquisitions, and receive financial support. Another reason is the need for funds to support international expansion through M&A. Additionally, family dynamics and governance play a role. When transferring a business to the next generation, it can be quite complicated. Having a third-party investor with no family ties can help provide an objective perspective, which can be invaluable during difficult discussions. This is also why we see families teaming up with other families for that external viewpoint. Lastly, they are looking to partner with financial investors to find the right people for the business."
ESG and AI emerging as key factors in M&A
Environmental, Social, and Governance (ESG) considerations remain a prominent topic in M&A. De Beule pointed out that 40 percent of respondents in 2021 reported systematically conducting ESG due diligence, a figure that has since risen in 2024. "The focus on ESG is growing, with shareholders and investors demanding greater transparency and compliance. However, new regulations such as the Corporate Sustainability Reporting Directive (CSRD) have not yet been fully integrated into M&A processes. This is expected to change as these regulations begin to apply to more companies."
Additionally, the survey explored the impact of AI on the M&A process. "While we’re still in the early stages, 70 percent of financial buyers believe AI will have a significant impact", De Beule revealed. Companies are increasingly exploring AI to streamline processes, including identifying acquisition targets more efficiently and improving due diligence through data scraping technologies.
Financing in a changing landscape
The survey also touched on the changing landscape of deal financing. With inflation on the rise, many respondents expect a shift from traditional to alternative financing methods. "Sixty percent of financial buyers are looking into alternative financing, like debt funds, as banks' appetite for deal financing is decreasing", De Beule explained. This shift reflects the evolving risk profiles of companies, particularly as they undergo significant transformation.
Optimistic outlook for 2025
Looking ahead to 2025, De Beule shared a positive outlook for the M&A market. "Both corporates and financial buyers are keen to do deals. While corporates continue to focus on carve-outs as part of their transformation journeys, they are also eyeing acquisitions to build and grow their businesses. Private equity remains optimistic, with buy-and-build strategies being a key focus."
In conclusion, De Beule emphasized that the Belgian M&A landscape remains active and dynamic, driven by both challenges and opportunities. "2025 will be an interesting and busy M&A year", she said, encouraging attendees to prepare for a future filled with both complexities and possibilities.
After the presentation, the attendees had the opportunity to discuss these trends further during a walking dinner, networking with peers and sharing insights on how they could navigate the coming year’s M&A landscape.
More insights in M&A?
You can get a copy of the PwC ‘Recent Trends in M&A’ here
An article about Peter De Keyzer’s keynote speech about challenges and opportunities in the turbulent twenties will be available on MandA soon.
