14.7.2016

M&A World Is Waking up to Smell the Potential in Finland

Related services

Mergers & Acquisitions

In Europe, the M&A year 2016 has not started off quite as well as many had hoped. In H1 2016, European investment activity was down by 19 percent in deal value compared to the same period in 2015. The continent’s M&A was dragged down by the uncertainty created by the UK’s EU referendum, as well as the US government’s clampdown on tax inversion deals.

Brexit especially slowed down investments made to the UK. Following a record 2015, UK M&A activity during the first half of the year recorded 638 deals worth approximately EUR 50 billion, a near 70 percent decline compared to H1 2015 and its lowest deal value since 2010.

During this economic slump and uncertainty, the Nordics remained stable compared to the slow economic growth and market volatility within Europe. The Nordic region attracted 497 deals worth EUR 38 billion, which represented a good 40 percent increase by value compared to H1 2015. The region represented 12 % of the total M&A value on the European deal making scene. Therefore, the Nordics has become an increasingly attractive M&A destination.

Four M&A Trends in Finland in 2016

A recent blog post on the Huffington post by Ira Kalb declares Finland to be the World’s Best Kept Secret, stating that Finnish products and companies haven’t been able to market themselves abroad as well as they should have – and deserve. However, in the light of recent Mergermarket M&A trend report for H1 2016, this seems not to ring entirely true.

Finland recorded 76 deals in the first half of 2016 worth EUR 11.2 billion, an almost 370% increase by value compared to H1 2015 (84 deals, EUR 2.4 billion). The highest valued deal of the first quarter was the EUR 646 million acquisition of the Kevitsa mine by the Sweden-based company Boliden. The statistics for the second quarter were again dominated by the sale of majority stake in Supercell, a company valued at USD 10,2 billion, by the Japanese telecom giant SoftBank to Chinese internet giant Tencent.

While the Finnish M&A landscape was dominated during H1 by some large-cap deals, some of which we had the privilege to work on, such deals often blur the rest of the statistics and thus may distract from other, sometimes more solid, or at least interesting, trends.

From our perspective, we have seen the following trends in this year’s Finnish M&A activity.

Sources:

Mergermarket H1 2016 M&A trend report + other Mergermarket deal insights
Thomson Reuters Mid-Market M&A Review, H1 2016