Four business trends will dominate corporate deals activity.

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The number of corporate mergers and acquisitions in Stockholm is expected to boom this year as private equity is back on the scene and venture capital firms and industrial firms get ready for more business, according to a report by business consultancy KPMG.

Eight out of ten managers at large Nordic companies expect the Swedish M&A; market to grow in 2011, showed the Competing for Growth report, making Sweden the biggest and most influential market in the Nordic region.

Most of the action will take place in Stockholm, according to Christopher Fägerskiöld, head of M&A; advising for KPMG Sweden.

”Stockholm is the main engine in the Swedish economy. Most of the expected deals will be made in the capital”, he told The Swedish Wire. “It's a reasonable conclusion given that much of Swedish industry is based or headquartered in Stockholm.”

Venture capital firms have had a difficult time unloading their holdings during the financial crisis, leading to a pent up need to sell. But businesses appear to be in a more confident mood, having largely recovered from the economic woes of recent years. Board members are once again comfortable talking about sustainable growth ambitions and shelved M&A; plans are now being dusted off.

Last year, deal activity rose rapidly in the Nordic region, with a 52 percent rise in deal volumes and a 121 percent increase in deal values compared to 2009. There were 158 deals in which companies from outside the Nordics bought a Nordic company – an increase of 48 percent.

“This will be a very exciting year”, Fägerskiöld said. “We see that both venture capital firms and industrial firms are well positioned for even more business in 2011."

Sweden's economy easily beat projections to post record growth in the fourth quarter, while 2010 as a whole turned out to be the strongest year since 1970. In March, the Swedish government raised its economic growth forecast for this year and said unemployment would shrink significantly.

Economic growth is also booming in Stockholm. During the third quarter of 2010, wages increased by 5.5 percent in Stockholm compared to the previous quarter, while the number of new businesses swelled by 17 percent. Stockholm will account for 43 percent of Swedish growth up to the year 2030, according to consultancy company WSP.

Nordic M&A; trends for 2011:

• The energy sector, particularly renewable energy, looks set to see a lot of activity in 2011.

• Healthcare service provision is proving popular due to its relatively stable and predictable flow of income. Consolidation among trade players is likely, as well as significant interest from investors.

• Due to the sheer size of the Industrial and Chemical markets, the sector is likely to continue to dominate M&A; activity, probably led by Sweden.

• Increasing consumer confidence may also give rise to healthier prospects in Retail and Consumer markets. Source: KMPG Competing for Growth 2011

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Commissioned advertorial. This article was published in collaboration between Stockholm Business Region and The Swedish Wire.

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