An overview of the Portuguese M&A
Activity Adaptability can minimize risks
New day, new rules. The sooner companies accept change, the quicker they can thrive in it. The market was hit by the late February start of the Ukrainian war following the Russian invasion. The unrest consequently caused, the hike in energy prices and inflation and the fast growth of interest rates impacted the remaining quarters with a reduction in the number of transactions and a lower volume, as to its value.
During the 1st semester of 2023, 267 deals have been registered, which still reveals some apprehension and uncertainty regarding the evolution of the transactional market in Portugal in 2024.
Deal Volume
M&A activity (including Private EquityVenture Capital and Asset Aquisitions) between 2021 and 2022
Over the next 2 years, significant factors will influence the M&A activity in Portugal: curbing the inflation curve, the interest rates, the energy prices and concerns of security of supply.
M&A activity in Portugal (Including Private Equity, Venture Capital and Asset Acquisition)
M&A activity in Portugal (Including Private Equity, Venture Capital and Asset Acquisition)
Impact On
Top Sectors
These sectors’ performance reflect a quick adjustment to the macroeconomic and geopolitical obstacles of the year – by the major players in the main sectors of the economic activity in Portugal.
Real Estate and Construction
Technology and Telecommunications
Energy and Renewable Energies
Financial and Insurance
- Real Estate and Construction
- Technology and Telecommunications
- Energy and Renewable Energies
- Financial and Insurance
Most active sectors in M&A, by value (EURm) and deal volume
In 2022, the crisis in the energy sector changed the paradigm of increasing
investment in the Energy and Renewables Energies sector in Portugal
Navigating the markets in 2024 will require not only overcoming financing difficulties, but also facing investors reshaping their portfolios, increasing fluctuating valuations and increasingly complex deals.
Strategic Projects
The Portuguese economy is facing major long-term challenges in order to keep moving closer to the European income level, in the context of the digital and climate transition financed by European funds.
spend until 2026
These projects are part of the country's efforts to tackle various challenges and seize opportunities. Although the list of strategic projects may have evolved, some of the main initiatives include the following.
2030 Climate change
In coordination with the EU objectives of the Roadmap for Carbon Neutrality 2050 (RNC2050), the Portuguese Energy – Climate Plan (PNEC) 2030 aims to meet EU overall greenhouse gases emissions targets. PNEC contemplates a bet on solar energy with a total investment of €21 billion.
Aviation: the portuguese national airline is for sale
TAP Air Portugal is the currently state-owned flag carrier airline of Portugal, headquartered at Lisbon Airport, which also serves as its hub. The carrier operates a domestic and regional network of services within Portugal and Europe as well as international services to North America, South America and Africa.
Have you heard about Sines Port?
Sines is the closest European Port to the United States, therefore Sines represents an effective gateway for gas coming to Europe. Conscious of its strategic position, Portugal plans to improve the efficiency of liquefied natural gas (LNG) offloading in Sines, increase storage and build a third pipeline to Spain, within four years.
Lisbon to a get new airport in 2035
It is expected that the activity at this airport will continue to grow in the upcoming years concerning the increasingly competitive tourism industry. The new airport is expected to be operational by 2035 and will finally replace the airport in Lisbon, currently at full capacity.
Railroads: Portugal's first high-speed line
Portugal is investing in an ambitious countrywide infrastructure that will bring together the country’s top ten cities and deliver high-speed rail connections to each of them. The so-called National Railway Plan aims to have a new railway bridge over the Tagus River as well as to connect Lisbon and Porto in three hours by train from Madrid.
Summary 2023
Portugal looks beyond the market's uncertainty
FDI in Portugal runs high
€12.6b is the total amount resulting from cross-border M&A activity in Portugal in 2022, representing a record breaking 248 FDI projects 24% more than in 2021.
Distressed assets will boost M&A activity in 2023-2024
Portugal accounted for €7.5 billion of NPL with national banks in 2022-Q2, according to Banco de Portugal. In 2024, the market volumes and impaired loans are projected to grow.
Energy will drive further market evolution
As activity intensifies, corporates will continue investing alongside financial sponsors – who in turn are partnering with developers to access new greenfield opportunities in the energy transition.
RRP
The implementation of the projects associated with the Recovery and Resilience Plan (RRP) has an important impact on the current projection. It is crucial that Portugal demonstrates the capacity to increase its productive capacity.
