The impact of Covid-19 has caused the Spanish economy to nosedive into a recession. The country has experienced a historical collapse in GDP, down by 18.5% in the second quarter of 2020, when a state of emergency was imposed, the population confined to their homes and there was a general shutdown in activity. Across the European Union, GDP contracted by 11.7% during Q2, with the United Kingdom leading the decreases with a sharp drop of 20.4%. It was followed by Spain, with a differential of 6.8 points with respect to the EU average.
The delicate situation in terms of the Spanish economy, the worsening visibility in terms of the evolution of the pandemic and the continuous spreading of the virus is resulting in the current outbreaks and generating uncertainty in the markets, which are, in turn, paralysing corporate M&A activity and even stalling operations that were in progress.
According to data from Mergermarket, July 2020, a key month for closing transactions, saw the lowest monthly volume of closed transactions for a decade, with a 61% drop compared to the same month a year earlier, interrupting the strong growth that we have seen in recent years.
Translated by Carmel Drake. Read the full article in Spanish.