German M&A market 2014: share to total value of transactions in Europe low, total deal count high

05 February 2015

In 2014 German M&A activity dropped by 17.6%, compared to 2013
• Record total deal count for the year with 798 transactions
• United States (US) of high importance for inbound and outbound activity
• By value, Industrials & Chemicals remained the most active industry, TMT sector market share low
• 6th German M&A and Private Equity Forum on March 18-19, 2015 in Düsseldorf

 

London – A regional trend report for the German M&A market of the independent mergers and acquisitions intelligence and data service Mergermarket states a significant decrease of M&A activity in Germany in terms of share to the total value of transactions in Europe. With total declared deal values at €55.7bn during 2014, German M&A activity dropped 17.6% compared to €67.6bn. However, total deal count for the year was the highest on Mergermarket record with 798 transactions, beating the previous high of 740 set in 2013.

 

Germany’s deal activity overall constituted only 8.3% to the total value of transactions in Europe during 2014, compared to the 14% in 2013. “Germany saw a decline in industrial output, exports and retail sales in Q4, which is reflected in the final quarters’ M&A,” Johannes Koch, bureau chief of Mergermarket Germany says. “After a strong first three quarters of the year with deals above €10bn, deal activity slowed during Q4 and reaching only €7bn.”

 

US and transatlantic transactions play major role
Marked by growth in transatlantic deal making, there was a significant increase in total cross-border activity during 2014. Inbound takeovers continued a trend of five consecutive annual increases by value, reaching a total of €44.2 bn. Emphasising this trend, 394 deals were the highest number on record, 56 more than the its peak in 2007. Globally, the US made the most acquisitions in Germany, increasing 191.3%. German firms were the target of 91 deals which contributed €13.5bn to the US-outbound activity into Europe.

 

German outbound activity was exceptionally positive – with deals valued at €83.9bn it reached the second highest annual value after 2007. German investments into the US have led this high with Mergermarket recording 53 deals worth €49.5bn – a 165% increase compared to the previous high of €18.7bn in 2012. This makes up almost a quarter (24.8%) of Europe’s total outbound deal making into the US. “Pharmaceuticals was a key driver, with two mega-deals taking up over 40% of the total investment into the US with. Merck’s acquisition of Sigma-Aldrich and Bayer’s takeover of Merck’s US-based consumer care business”, states Johannes Koch. “Figures show that the US continues to play a major role for M&A transactions globally. We expect them to remain an important destination for European companies and Germany.”

 

Industrials & Chemicals sector remains most active industry, TMT sector market share drops
With five deals above €1bn the Industrials & Chemicals sector kept its status as the most active sector by value with €16bn-worth of deals, accounting for 29% of the total German M&A activity. Due to the absence of large-caps deals (above €5bn) during 2014, the TMT sector, the target industry of the highest valued German deal during 2014, saw its market share by value drop to 19%, compared to 41% in 2013.

 

6th German M&A and Private Equity Forum on cross-border deal outlook 2015
On March 18 and 19, 2015, Mergermarket will host the 6th annual German M&A and Private Equity Forum in Düsseldorf to examine further the outlook for capital raising and M&A as well as the cross-boarder deal outlook. Over 400 domestic and international company CEOs, CFOs and Heads of M&A are expected to join private equity investors and corporate advisors. For more information visit http://digital.mergermarketgroup.com/germany2015/.

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