Dhe global merger and takeover market can already record the year 2021 as its strongest to date: In the course of October, the cumulative volumes exceeded those of the previous record year 2007. In Germany, previous highs have not yet been reached – but here too the market is heading for a high one Annual accounts too. And here in this country several favorable factors have failed to materialize or have been weak, according to the investment bank Goldman Sachs.
Tibor Kossa and Christopher Droege, co-heads of business for M&A (Mergers & Acquisitions) in Germany and Austria, cite five aspects: The very large transatlantic mergers were missing, as was the “transformational deals” that are fundamentally changing the industry. The major merger between Vonovia and Deutsche Wohnen in the real estate industry was an exception. Furthermore, it was not a year of “hostile takeovers” in Germany, i.e. those against the will of management, and also not of mega takeovers by private equity, called LBOs (large buyouts) in industry jargon. After all, activist shareholders did not attract any particular attention – apart from Enkraft Capital, which has been calling on the energy company RWE to phase out coal more quickly for some time.
Private equity is sitting on more and more money
In the opinion of the bankers, these factors will soon have more influence on events again. Take America as an example: Easier travel, less political tension under President Joe Biden, the pursuit of geographic expansion and secure supply chains should favor mergers between German and American companies. Increasing impulses are to be expected from investment companies because they have continuously increasing investment sums. “There is simply more money there,” said Droege. According to data from statistics service providers Prequin and Pitchbook, the total amount of assets managed by private equity funds has grown globally from $ 2.2 trillion in 2013 to an estimated $ 5.1 trillion. “The funds are getting bigger and bigger,” said Droege. The investors finance individual deals from certain individual pots and can spend increasing amounts from them – in addition, there is still the possibility of bidding together with competitors.
Zooplus as a model case
In the case of the Munich online pet supply retailer Zooplus, EQT and Hellman & Friedman teamed up, if only because their individual bids threatened to fail. They had entered the race with such, and each would have raised more than three billion euros in a deal that, remarkably, was financed without credit, only through equity.
Overall, several factors come together that favor large transactions. “That makes the outlook for super LBOs very positive,” summarized Droege. The role private equity has played so far this year is derived from figures from M&A data service provider Refinitiv. According to this, 43 percent of the takeover volume worldwide came from transactions in which private equity was involved as a buyer and / or seller. Values around 30 percent were common in previous years.
.