Few but significant transactions in 2023
Published: Monday, Dec 18th 2023, 12:20
Updated At: Tuesday, Dec 19th 2023, 00:59
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The environment for mergers and acquisitions was anything but ideal in 2023. Rising interest rates, inflationary pressure, geopolitical uncertainties and a weakening economy hampered M&A business in the domestic market. Nevertheless, there were some sensational transactions with Swiss participation over the course of the year.
"Overall, the environment for transactions in 2023 was not particularly good," summarized Timo Knak, Head of M&A at KPMG, in an interview with AWP. There was a lack of stability and many companies were very busy with their own homework.
Compared to the previous year, the number of transactions fell by 20 to 25 percent, as Knak estimates. However, activity in the two previous years had been exceptionally high due to pent-up demand following the coronavirus pandemic. But even in a long-term comparison, 2023 can be described as "average at best".
UBS/CS in focus
However, some very special transactions took center stage in 2023. Everything was overshadowed by the "ordered" takeover of Credit Suisse by UBS. The purchase price of a good CHF 3 billion in UBS shares was described by commentators as favorable - at least on paper.
The takeover of watch and jewelry retailer Bucherer by the Rolex Group also caused a stir. Exact figures on the deal are not known, partly because it took place away from the stock markets. However, according to market observers, the acquisition is likely to have cost the luxury watch group around CHF 4 billion.
In November, the Zug-based commodities group Glencore announced what was probably its largest acquisition in terms of volume. The Zug-based company is acquiring a 77% stake in the steel coal business of the Canadian mining company Teck and is paying almost USD 7 billion for it. Glencore intends to list the coal business on the stock exchange within two years of completing the transaction.
Transactions worth billions in the SMI
There were also major movements in the pharmaceuticals sector in particular. As had been expected for some time, Novartis spun off its generics subsidiary Sandoz. As an independent company, this now has a market capitalization of around CHF 12 billion. In June, Novartis also sold the eye medicine Xiidra to Bausch for up to USD 2.5 billion.
Towards the end of the year, industry neighbor Roche went on a shopping spree. In October, the Basel-based company bought an experimental stomach medicine from the US biotech company Roivant for USD 7.1 billion and shortly afterwards an anti-obesity drug from Carmot for USD 2.7 billion.
Cement and building materials producer Holcim reported another billion-dollar transaction in the SMI. The purchase of the US company Durolast for USD 1.3 billion further strengthened its presence in the North American roofing business. Holcim also pushed ahead with its transformation from a cement-based building materials manufacturer to a provider of sustainable construction solutions through various smaller acquisitions and disposals.
Georg Fischer with leap in growth
The industrial corporation Georg Fischer made a leap in growth in 2023 with the acquisition of the Finnish piping specialist Oponor. The Schaffhausen-based company made the largest acquisition in the company's history for around CHF 2.2 billion, boosting sales by around a quarter. The aim is to become the new number 1 in the transportation of water and other liquids.
The sale of the profitable Swiss business to the Migros subsidiary Medbase was strategically transformative for the mail-order pharmacy Zur Rose. The company, which now operates under the name Doc Morris, received funds of 360 million Swiss francs as a result. The money is intended to give the company financial leeway until e-prescriptions are introduced in Germany.
The two traditional Swiss companies Tornos and Starrag have joined forces in the broad SPI market. The merger of the two machine tool manufacturers was approved by a large majority at the respective general meetings at the end of November.
Increase in activities expected
Although KPMG expert Timo Knak is not euphoric about the coming year, he is nevertheless confident. "If the outlook becomes more stable and the economy improves again, we can certainly expect an increase in M&A activity."
Stimulus could also come from the private equity sector, where there is still a lot of "dry powder", according to the expert. Last year, the sector, which normally accounts for around a third of all transactions worldwide, was still "on the brakes".
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