The M&A landscape in France for 2024 is marked by mixed performance due to political and fiscal uncertainties, despite global optimism. While significant transactions have occurred, overall activity remains below the peaks of 2020 and 2021. Foreign investments have decreased amid instability, with domestic deals leading the market. Experts express cautious optimism for a resurgence in M&A activities in 2025, anticipating stabilization of global uncertainties as the year progresses.
The State of Mergers and Acquisitions in France for 2024
The mergers and acquisitions (M&A) landscape in France has shown a mixed performance in 2024, largely influenced by the political and fiscal uncertainties prevalent during the second quarter. Despite these challenges, global indicators such as the moderation of central banks’ monetary policies, robust stock market performance, and the expectation of a soft economic landing in the United States have fostered a sense of optimism. This outlook is essential for dealmakers aiming for a strong finish to the year, as highlighted by financial data expert Dealogic.
Challenges and Opportunities in the French Market
In France, the situation is more nuanced. Céline Méchain, the co-head of Goldman Sachs’ Paris office, describes the current M&A market as “convalescent.” While there have been significant transactions, the overall volume is far from the highs experienced in 2020 and 2021, which were exceptional years following the economic recovery post-lockdowns. In 2021, the market reached unprecedented levels, driven by the rebound that began in the summer of 2020.
Jérôme Morisseau, co-director of Bank of America’s investment banking division in France, notes that after a “halt on all fronts” in 2023, 2024 has seen a resurgence of activity from corporate players. He mentions that while funding activity remains subdued, there are signs of recovery. “Funds cannot afford to wait indefinitely, especially given the record number of assets they have held for multiple years,” he adds.
However, foreign investment is hindered by uncertainties in the fiscal landscape. A representative from a prominent business law firm in Paris points out that many international investors are hesitant, waiting for a more stable environment. Those with alternative investment options are likely to pursue those instead. While French companies are actively seeking opportunities abroad, foreign interest in France has waned, particularly after the political shifts announced in June.
According to recent data from Bain & Company, foreign acquisitions of French companies dropped 22% in value year-over-year, totaling $39 billion, and decreased 15% in volume. Conversely, French firms’ overseas transactions fell by 12%, amounting to $45 billion. Domestic deals have been the driving force behind M&A activity, accounting for half of the top 20 transactions, such as BNP Paribas acquiring Axa’s asset management division for €5.4 billion in August.
As the year concludes, experts maintain a cautious optimism. Jérôme Morisseau predicts an uptick in M&A activities in 2025, particularly in the latter half of the year, as global uncertainties begin to stabilize. This sentiment reflects a broader hope for renewed vigor in the market moving forward.