||The global financial crisis had a swift and significant impact on the global mergers and acquisitions (M&A) market, affecting some regions and industries more drastically than others. From any crisis comes change; the crisis allowed some Eastern markets to boom while many Western markets struggled for years to regain traction following the collapse of the Lehman Brothers. This shift in power was not only visible on a geographic level, but also on an industry level as consumer markets struggled while technology and natural resource markets remained strong. |
To identify and explain the trends of the European and Chinese M&A market, data was analyzed from multiple sources, such as various financial journals and regional newspapers, as well as academic studies and papers. A comparison of the four regions showed that Europe was most affected by the financial crisis, with the greatest decrease in volume and value of deals, and has yet to recover to pre-crisis levels. China did not see a decrease in overall M&A activity, but managed to profit from favourable market conditions. This thesis discusses the financial crisis’ impact on the ability of companies to engage in mergers and acquisitions in a global perspective but also in a more regional standpoint between Europe and China. Explanations for the changing behaviour of managers and investors can be found in psychological, behavioural finance, as well as in strategic and operational theories and studies. Factors such as risk perception, risk aversion and individualism versus collectivism play a role in making decisions in M&A matters.
In Europe the industrial markets, consumer markets, and technology, media and telecommunications (TMT) were the industries that saw the greatest reduction in M&A activity in the years following the crisis. In Europe, these industries are still struggling to recover. China has been undergoing rapid growth in the TMT sector, and faced a brief decline in M&A deal activity in the industrial markets and financial services, although both industries were quick to recover. For the future, the M&A market seems quite similar among China and Europe, both regions predicting growth in the upcoming years, although growth is still a bit slower in Europe than in China. In regards to the specific industries, the healthcare sector, consumer markets, TMT and financial services will be the main drivers in the next years’ M&A market.