Further IPOs on the horizon in Switzerland
Published: Friday, Apr 5th 2024, 10:20
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The first successful IPO in Switzerland this year is likely to be followed by others. It is already certain that telecoms provider Sunrise will return to the Swiss stock market in 2024.
The week before last, skincare specialist Galderma ventured onto the Swiss stock exchange. "After a period of almost two years without any 'real' IPOs on the SIX Swiss Exchange, it was important that the IPO succeeded," says Andreas Neumann, Head of Equity Capital Market at Zürcher Kantonalbank (ZKB), when asked by the news agency AWP. This refers to an "Initial Public Offering" (IPO), a classic IPO with the issue of new shares.
"We are currently experiencing the start of a reopening of the IPO market in Europe and Switzerland," says Reinout Böttcher, Head of J.P. Morgan's Swiss business and local investment banking.
Significantly more favorable environment
Galderma was an extremely successful IPO which, with an issue volume of CHF 2.3 billion, is also likely to be one of the largest transactions in Europe, summarizes Neumann from ZKB. The former Nestlé subsidiary went public on March 22 with a total market capitalization of around CHF 14.5 billion.
It is the largest "real" IPO in Switzerland since Landis+Gyr in 2017. Most recently, there have only been several major spin-offs of companies already listed on the stock exchange (Sandoz and Alcon from Novartis, Accelleron from ABB).
According to experts, the mood, which has not been ideal for new entrants for three years, has visibly brightened. The stock markets have already staged an impressive rally in recent months, as investors are pricing in a "Goldilocks economic scenario", says Böttcher from J.P. Morgan. This refers to a moderately growing global economy with moderate inflation and low interest rates. "This has created a much more favorable environment for capital market transactions and IPOs in particular," says Böttcher.
Peak from 2025
The IPO wave has now started, but it may not fully unfold until next year. Market participants are expecting further IPOs in the coming months - some as early as 2024, but mainly from the first half of 2025.
ZKB expert Neumann expects up to three transactions in 2024 - including possible spin-offs. "In Switzerland in particular, the list of high-caliber IPO candidates is long," says Böttcher, J.P. Morgan Country Head Switzerland.
Markus Wetter, Head of Equity Capital Market DACH at UBS, also expects a normalization towards the usual level over the next twelve months: "The long-term average in Switzerland is four to five IPOs per year." Investors are broadly interested in many different sectors.
Comeback of Sunrise
Although there are currently no concrete announcements for real IPOs in Switzerland with the issue of new shares, there are plans for further spin-offs. For example, the Liberty Global Group is planning to spin off its Swiss telecoms subsidiary Sunrise in the second half of 2024 and float it on SIX.
In addition, some Swiss companies want to list a segment abroad: for example, the industrial group Holcim wants to list its North American business in the USA and Phoenix Mecano wants to list part of its DOT division in China. From 2026, the TX Group plans to list the Swiss Marketplace Group (SMG) - an operator of digital marketplaces and a joint venture with Ringier and others - on the Swiss stock exchange. ABB is also sticking to its plans to spin off the e-mobility division.
Other companies are also planning an IPO in the medium term, such as MediCrops, a company specializing in the distribution of medical cannabis. The IPO is to take place in the next 18 to 24 months, it was announced in December 2023, but it was still unclear on which stock exchange in Europe. Other companies have announced in the past that they are considering an IPO. Montana Aerospace, for example, is considering an IPO for its energy segment.
There could also be one or two IPOs from the portfolios of private equity firms in the medium term. The large Swiss asset manager Partners Group, for example, had fewer sales in 2023 than at any time since the financial crisis. The company has few investments in Switzerland. However, watch manufacturer Breitling would be a candidate for a possible IPO. But it is likely to be several years before that happens.
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