Mergers and acquisitions in Portugal reach 2014 peak
Despite the advances and setbacks, the country shows better performance in value than many other European countries.
With companies trying to cut costs due to the pandemic, merger and acquisition (M&A) deals are accelerating across Europe. In Portugal, growth is even faster than in other countries and the figure has already peaked in 2014, according to MergerMarket’s Portugal Trend Report 2020 in partnership with the law firm Cuatrecasas and Marsh.
The annual value of M&A transactions in Portugal reached 8.8 billion euros (out of 60 transactions), which represents the highest value in six years and an increase of 211% over the same period. The year 2020 is not, however, being linear as the business in the country has been strongly influenced by the pandemic, in line with the global trend.
The report indicates that Portugal faced difficulties caused by the coronavirus pandemic, with companies suspending large-scale spending and travel restrictions complicating the logistics of negotiations.
“This year Portugal went through a period of suspension of M&A activity due to the outbreak of the coronavirus pandemic and subsequent restrictions that put some investments on hold. With the increase in infection cases across Europe, the new restrictions are likely to limit M&E activity again in the final weeks of 2020 and the start of next year. However, the market may be cautiously optimistic that M&A will resume pre-Covid levels following vaccine development,” points out Jonathan Klonowski, research editor, EMEA at Mergermarket.
Despite the advances and setbacks, the country shows better performance in value than many other European countries. The biggest deal of the year in Portugal to date was the sale of Brisa by the José de Mello Group and the Arcus fund to a consortium of Dutch, South Korean and Swiss investors.
Foreign investment in Portugal during 2020 showed contradictory signs. Although there have been several high-profile operations, the total number has fallen. Foreign investors announced 30 operations from the beginning of the year to the end of November, down from 53 in 2019. Despite this, the sum of the amounts traded reached 6,900 million euros.
Private equity activity in Portugal fell significantly in 2020 after a record year in 2019. So far, only eight buyouts with a combined value of 1,200 million euros have taken place.
