US and China increase investments in German M&A market

19 March 2015

US and Germany: Last year’s record deal flow looks set to continue
• China’s slowdown: What is the right strategy for German Mittelstand?
• Shareholder activism on the rise in Europe


Düsseldorf– Mergermarket, an independent mergers and acquisitions intelligence and data service, today held its sixth German M&A and Private Equity Forum in Düsseldorf. During the two-day conference leading industry players discuss the framework and the outlook of the German M&A market. A key topic during this year’s conference was the growing interest of investors from the US and China in German companies and the rise of shareholder activism in Europe. Industrials & Chemicals and the energy sector are expected to be the main drivers for M&A this year.


Transatlantic M&A continues apace in 2015
Global M&A activity still gathers pace, with dealmakers showing continued confidence in delivering on large-scale cross-border deals. German companies have been at the centre of this trend, with 399 inbound deals announced in 2014, a record number. “A significant proportion came from US companies during their transatlantic sweep last year“, states Johannes Koch, German Bureau Chief of Mergermarket. Over a third of both inbound deal value and deal count has already come from US investors in 2015. German companies were also targeting US firms in 2014 with 53 outbound deals equalling €49.5 billion – the highest amount recorded by Mergermarket.


Growing interest of Chinese investors 
Chinese buyers showed a significant level of interest in German companies last year. For the fifth year in a row, the number of transactions increased resulting in a total of 23 deals equalling €2 billion. That is a value increase of 86% compared to 2013. Inbound activities from China are expected to grow further and high quality goods with the Made in Germany label have the potential to increase German outbound activities in China. Markus Solibieda, Partner of Mandarin Capital Partners: “China is the next big opportunity for the German Mittelstand, despite existing concerns about the GDP growth rate. However, European acquisitions in China will remain much more important than Chinese acquisitions in Europe over the next decade.”


Rising shareholder activism in Europe
Germany has seen a number of high profile shareholder activist cases in recent years, particularly in M&A with the tried and tested appraisal rights process. For example, Celesio, Kabel Deutschland and Conwert have all seen activists emerge during takeover battles.


“There has been increasing interest in Europe overall from US activists of late,” says Lucinda Guthrie, Deputy Global Editor at Dealreporter “It will be interesting to see whether they use traditional M&A appraisal proceedings or a more US-style approach if they swoop on Germany.”


Speakers concurred that activist campaigns could begin to play a bigger part in the German M&A landscape: “Activist shareholders could play an increased role,” according to Thomas Schulz, Partner, Noerr LLP, Head of Noerr London “We will continue to see carve-outs as part of corporate strategies and further consolidation in the energy and telecom sectors, albeit for different reasons.”


Each year the German M&A and Private Equity Forum attracts over 400 delegates from public and private companies, private equity, investment banking, financial and legal advisory.


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