M&A season begins: how should companies prepare for autumn transactions?
The end of summer not only sees business pick up again, but also the market for mergers and acquisitions (M&A). The period between September and November is traditionally the time for preparing and closing year-end transactions, when companies look for growth opportunities that can still be realized in the current fiscal year. However, many companies are slow to address the legal and competition law risks associated with transactions, which can have serious consequences, such as protracted approval processes or even failed deals.
Why is the M&A market active now?
During the summer months, many companies adopt a wait-and-see approach, so strategic negotiations and acquisition processes only accelerate in the fall.
As the end of the year approaches, several factors are driving companies toward transactions:
Tax and financial planning: companies want the transaction to be accounted for in the 2025 financial year.
Year-end performance targets: it is important for investors and management that growth figures improve.
Market opportunities: Many smaller companies struggling with financial difficulties are now becoming acquisition targets.
Interesting fact:
According to international surveys, nearly 40% of M&A deals are closed in the last quarter of the year, which requires special attention from the transaction team.
The biggest risk: competition authority approvals
Many people believe that competition authority approval is not required for the acquisition of small and medium-sized enterprises (SMEs). However, this is a dangerous misconception.
In Hungary, there is a notification requirement if the combined turnover of the companies concerned exceeds HUF 15 billion.
Other rules apply to transactions within the EU, especially if the group operates in several countries or provides digital services.
In certain industries (logistics, healthcare, technology), even smaller transactions may be investigated by the authorities as they may be of strategic importance.
Failure to comply with the notification obligation may result in the transaction being invalidated or fines of millions of forints.
Due diligence – uncovering hidden problems
A successful transaction does not begin at the signing, but much earlier, during the due diligence process.
This legal and financial review allows the buyer to get an accurate picture of the target company's situation.
The most commonly identified problems are:
Hidden tax and labor law risks – such as irregular employment or unpaid contributions.
GDPR and data protection deficiencies, which may result in immediate regulatory action.
Contractual obligations that may hinder the company's future operations (e.g., exclusivity agreements).
Environmental and sustainability (ESG) obligations, which will become increasingly stringent from 2025 onwards.
Tip:
The earlier the due diligence process begins, the less likely it is that the transaction will fail at the last minute due to an unexpected legal problem.
M&A strategy for fall 2025
This season, companies should focus on three main areas:
Competition law planning at the start of negotiations
The approval process can take months, so the time needed to prepare for the transaction must also be taken into account.Managing international risks
If the acquisition involves several countries, a coordinated strategy is needed that takes into account local regulatory differences.ESG and sustainability considerations
From 2025, EU regulations will require more and more companies to prepare sustainability reports, which may be a factor in the evaluation of an M&A process.
Summary: timing and preparation are the keys to success
The autumn M&A season offers exciting opportunities, but precise preparation and strategic thinking are necessary for transactions to be successful. Competition authority approvals, legal due diligence, and international risk management all determine whether a company can ultimately close an acquisition safely and successfully.
A well-prepared transaction is not only faster and safer, but also creates long-term value for the company and its investors.