h2 2020 | media talk 10
media talk | h2 2020 11
UK MEDIA M&A: OVERVIEW
In line with the global downturn, UK media transactions declined by roughly 38% in 2020 year-on-year. Underlying that figure, however, is the fact that deals held up reasonably well through the latter part of the year. Though announcements fell relatively silent in August, a final flurry in December buttressed overall volumes.
Against a backdrop of unprecedented economic disruption, we saw the lowest number of media M&A deals since we began tracking the metric back in 2004. In fact, only the financial crisis of 2009 had a comparable impact on deal flow, when the threat of shrinking credit lines massively hindered M&A activity.
FIGURE 3: UK M&AVOLUMES ANDVALUES (MEDIA SECTOR 2004-2020)
180
50,000
Number of deals
Value of deals (£m)
45,000
160
40,000
140
When it comes to M&A in 2021, however, there are already grounds for cautious optimism. For one thing, Brexit is no longer an impending reality; the fact of a deal, despite its shortcomings, provides much-needed clarity for most businesses. The vaccine rollout, a clear success so far, will hopefully foster a sense of optimism and enable businesses and consumers alike to begin looking ahead with more confidence. And, as in the US, the UK Government will be looking at potential tax changes – including around Capital Gains Tax. This will be of great interest to investors – while deal flow may not return to pre-COVID levels immediately, the coming year is likely to see active investors and businesses look to M&A as a means of reclamation.
35,000
120
30,000
100
25,000
80
20,000
60
15,000
40
10,000
20
TRANSACTIONS SAW A SIGNIFICANT DECLINE IN AN UNPRECEDENTED LOCKDOWN.
5,000
0
0
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