Mon, Feb 5th 2024
Swiss M&A Activity Dips in Uncertain Times. Interest Rates and Economic Woes Impact Deals. Industrial and Tech Sectors Remain Buoyant.
The Swiss market for mergers and acquisitions (M&A) has had a weak year. Compared to the record year of 2022, transactions fell by a quarter.
With a total of 484 deals, the consulting firm KPMG comes to a total transaction volume of 72 billion US dollars. In 2022, a record 647 mergers and acquisitions with Swiss participation and a volume of 139 billion US dollars were counted.
“The lower number of deals compared to the two previous record years is primarily due to higher interest rates and increased economic uncertainty,” Timo Knak, Head of Deal Advisory at KPMG Switzerland, was quoted as saying in a press release on Monday. He expects a slight upward trend for the current year.
According to the KPMG report “Clarity on M&A”, the industrial sector, the telecommunications, media and technology (TMT) sector and the pharmaceuticals and life sciences sector were the most active at sector level.
Meanwhile, the experts categorize the low proportion of mergers and acquisitions with private equity involvement as unusual. Private equity companies were involved in less than a quarter of transactions in 2023, compared to around a third in previous years.
“Many private equity investors focused on optimizing their existing portfolios last year due to the difficult economic environment,” explained Knak. In addition, the price expectations of sellers and buyers often differ.
The largest transaction in 2023 was not the takeover of Credit Suisse by UBS, which only came in fourth place. The largest deal, however, was the sale of the agricultural company Vittera by Glencore to the US group Bunge for USD 17.3 billion. The second-largest deal was Roche’s takeover of the biotech company Telavant, with a volume of just under USD 7.3 billion.
Glencore took third place again, with the purchase of Teck’s steel coal division Elk Valley Resources (USD 6.9 billion). The Swiss group had attempted to take over the entire Canadian mining company at the beginning of the year. However, the plans failed due to resistance from Teck and Canadian politicians.
As far as Swiss companies are concerned, they also acquired significantly more foreign companies in 2023 than vice versa: 216 acquisitions were offset by 118 sales. According to the figures, deals within Switzerland accounted for around a fifth of all mergers and acquisitions with Swiss participation.
©Keystone/SDA
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