• Private equity deals increased
• Mainly investors from USA
In a study for the year 2022, PwC Germany has disclosed the results of M&A transactions between foreign investors and German companies. The presentation contains all company purchases and sales as well as mergers. At the same time, the report takes into account leveraged buyouts, spin-offs, privatizations and takeovers of minority stakes in German companies by foreign investors that were announced between January 1, 2018 and November 15, 2022.
Transactions lag behind last year
The past year has been very challenging for foreign investors due to numerous obstacles. According to the study, higher energy and raw material prices, the Ukraine war with its dramatic consequences for many supply chains and China’s corona policy are just a few examples.
996 transactions with foreign participation had been reported by the reporting date of November 15, 2022, with a total value of 67.7 billion euros. For comparison: In the previous year 2021, the number of transactions was 1,286 and the total value was 104.8 billion euros. PwC estimates that by the end of 2022, 1,140 transactions with a total value of €76.7 billion had taken place. Thus, the deals would have fallen by 11.4 percent, the total value would be 26.8 percent below the previous year.
Steve Roberts, EMEA Private Equity Leader at PwC Germany, said in a press release: “Even in times of macroeconomic uncertainty, Germany, with its diversified industry, reliable infrastructure and stable social and legal framework, remains in the focus of foreign investors. Even if M&A activity in While this year is down from last year’s record levels, quality assets continue to trade at high prices, reflecting continued investor interest.”
Private equity deals up
According to the study, it should be emphasized that the share of private equity deals in all transactions with foreign participation has increased. In 2018, this share was 37.4 percent, now it is 49.3 percent. According to PwC, foreign financial investors would thus play an increasingly important role in German transactions.
Investments often in technology sector
Foreign investors often put their money in technology companies. 28.9 percent of the transactions went into this sector – closely followed by the industrial manufacturing sector with 22.8 percent and the retail and consumer goods sector with 16 percent.
According to PwC, there was a significant increase of six percent in the energy sector. Roberts explained this: “The increase in investments is related to the high energy prices. And to the efforts of the federal government to promote energy savings and the use of green electricity and to reduce dependence on individual energy suppliers.”
The technology sector accounted for 35 percent more private equity transactions than in the previous year with 31 percent. In contrast, they fell in the retail and consumer goods sectors last year. In 2022, these will only be 17 percent compared to the previous year with 19 percent.
The share of strategic investors in the technology sector fell by one percentage point, from 24 to 23 percent. Their share also fell from 16 to 15 percent in the retail and consumer goods sector. In contrast, it rose slightly in the healthcare and energy sectors.
Investors from the USA front runner
Investors from the USA lead the ranking of all M&A transactions in Germany with foreign participation with 22.5 percent. Closely followed by investors from the UK in second place and the Netherlands in third place.
In terms of the total value of transactions, the US share is even 54.2 percent. The reason for this was provided by numerous mega deals by US financial investors in Germany, including the acquisition of Deutsche Telekom’s radio tower division by Brookfield Asset Management and the DigitalBridge Group.
Editorial office finanzen.net
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