Despite the challenges faced in 2020, Credit Suisse France performed very well overall. While M&A activity was subdued due to the Covid-19 crisis, there were some very successful deals and the outlook for 2021 is promising.
Looking back on 2020, the M&A market got off to a good start before the Covid-19 pandemic started to spread and the first lockdown came into effect.
During the initial lockdown in the spring, managers prioritized managing health-related challenges followed by the need to handle liquidity issues. This led to some M&A processes being interrupted while in some cases, we saw the occasional cancellation.
It is worth noting that, in contrast to the 2008–2009 crisis during which banks were considered to be at the heart, or even the origin of the problem, in this crisis banks played an essential role in the real economy. Credit Suisse’s DCM and equity derivatives teams were very engaged and active in servicing clients during this first phase.
In the second phase, a new phenomenon emerged with executives. After initiating careful analysis of potential opportunities, they began to position themselves as consolidators in their industries. When lockdown measures were lifted for the first time, we began to see two types of deals emerge: transactions identified before the Covid-19 crisis and new opportunities resulting from this crisis.
While the second French lockdown has again slowed down market activity, it has done so in a less drastic way than the first.
France saw a number of important transactions in 2020 such as the sale by Engie, who was advised by Credit Suisse, of its stake in Suez to Veolia. Another example was the creation of a major French public financial hub through the transfer of shareholdings in the capital of CNP Assurances from the State and the Caisse des Dépôts (where Credit Suisse advised the Supervisory board) of La Poste, then from La Poste to La Banque Postale.
The prospect of continued vaccine deployment across Europe and the world could lead to a very active fourth quarter of this year given both the backlog of transactions and the potential wave of consolidation we could see as a result of the economic crisis.