The markets have hardly settled after our last market update and while this is not the place to revise the questions caused by the U.S. economic slowdown or the European debt crisis on the Finnish M&A and corporate finance market, we will merely outline what is likely to happen in here during the summer and the autumn.
Generally speaking, the good news is that larger sound companies are doing very well, especially due to good demand in the international markets on capital goods, consumer durables and materials. However, the slowdown and the lack of financing, will affect some of the Finnish companies in the near term.
A review of the most recent financial accounts evidences that a number of Finnish listed companies have stated (as required by IAS and the Finnish Financial Supervisory Authority) in their accounts that there may be significant near-term questions in securing the continuity of their business and operations. This means that, we will see more lower-rated corporate bonds, finance driven takeover bids and/or divestments at less-than optimal prices.
Our view is that there will be a lot of M&A market activity by these companies during the latter part of 2012. Although, if we look at Q2, spending on deals all over the world has been significantly lower than the same quarter in 2011. Private equity is likely to be more on the sell-side. We will also focus on relevant trends in outsourcing, technology and IP-driven transactions.
We also think that the Euro will hold and there will be a political and ECB stimulus solution to the short–to-mid term financial situation affecting the Euro-zone and rest of the Europe. However, the inability to resolve these complex issues earlier on with a stern and concise plan has affected negatively corporate financing and the economic conditions faced by the European companies and investors.
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