Austria – Distressed M&A 2022

While deal volumes have pushed global M&A to all-time highs in 2021 and it can be expected that the M&A market will remain robust in Austria in terms of the volume and number of deals in the last quarter of 2021 and beyond, we have not observed an increase in distressed M&A transactions in Austria.

However, we may see an increase in distressed M&A in specific industries within the next 12 to 18 months. Such distressed M&A transactions may, inter alia, be seen in retail as well as in the transportation industry. In particular, experienced investors and crisis-proof strategic buyers with cash reserves or an intact stock price may use distressed opportunities and are eager to purchase distressed targets at favourable valuations. Furthermore, the sale of non-core business reduces costs and simultaneously increases much-needed liquidity in times of crisis.

Due to covid-19, the duty to file in Austria for insolvency resulting from over-indebtedness was suspended until June 2021. Based on our experience the number of distressed M&A transactions has not further increased since June 2021. There may be an increase in distressed M&A within the next 12 to 18 months as the covid-related governmental support has been essentially reduced. In particular, experienced investors and crisis-proof strategic buyers with cash reserves or an intact stock price may use distressed opportunities and are eager to purchase distressed targets at favourable valuations.

Furthermore, the sale of non-core business reduces costs and simultaneously increases much needed liquidity in times of crisis (i.e., we expect an increase in carve-out transactions in the last quarter of 2021 and beyond).

Originally published in Distressed M&A – Work areas – Getting The Deal Through – Lexology