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There were a total of 1696 deals in Germany, Austria and Switzerland in the first half of 2021 - a top figure (2nd half of 2020: 1531 deals). As such, the deal market is well on its way to reaching a new record - in the previous peak year of 2019, there were 1251 deals in the first half of the year and 1558 in the second half. The value of the deals has also increased, from €50.8 billion in the second half of 2020 to €73.6 billion in the first half of 2021.
This and even more is presented in the “M&A Insights” analysis issued by the auditing and consulting firm PwC Germany for Germany, Austria and Switzerland (DACH). In it, PwC analyses how the M&A industry developed in the first half of 2021, highlights the top deals and presents in which sectors the largest transactions took place, measured by value and volume.
Most of the major deals in the DACH region took place in Germany. The greatest stir was caused by the planned takeover of Deutsche Wohnen by Vonovia. The transaction has not yet been completed, but Vonovia is showing how determined it is, and it has currently offered €19 billion (as of August 2021). The takeover of the Swiss healthcare company, Roivant Sciences GmbH, by the US-based SPAC Montes Archimedes Acquisition Corp follows at quite a distance - deal value: 5.2 billion euros. The third largest deal was also made in Switzerland: the private equity firm Cinven and Bain Capital acquired the speciality ingredients division from the Swiss chemical and pharmaceutical company Lonza for 3.9 billion euros.
Germany recorded the most deals in the first half of 2021, a total of 76.2 percent, with 1292 out of a total of 1696. In Switzerland, 295 transactions were concluded (17 percent), in Austria 109 (6 percent).
Noticeable: More deals took place in this period than, for example, in the second half of 2019, which was the half-year with the most deals in recent years (a total of 1,558). Even though there were slightly fewer mega-deals (deals with a value of one billion euros or more) than then, this is still a top value, with 13 compared to 18. In addition, more smaller deals with a transaction value of less than 50 million euros took place in the first half of 2021: 316 instead of 205 in the second half of 2020.
The outlook for M&A activity in the second half of the year is positive: For all three DACH countries, the experts expect the GDP to rise again: For Germany they expect an increase of 3.6 percent, for Austria and for Switzerland 3.5 percent each. This could improve investor confidence. Germany, in particular, has established itself as a safe haven for investments. Brexit is reinforcing this development. Added to this is the extensive financial support from the state and the well-positioned German SMEs with their many “hidden champions”, which often have outstanding expertise in their respective niches. These conditions will continue to draw the focus of investors to Germany in the future and are expected to ensure more deals.
In Germany, in the first half of 2021, the number of transactions increased to 1292 (2nd half of 2020: 1142 deals). The same applies for the deal value: at €54.1 billion, it is again approaching the value of the first half of 2020 (€54.8 billion).
At the same time, demand has increased for modern technologies: there were 474 deals in the technology, media and telecommunications (TMT) sector in the first half of 2021 (2nd half of 2020: 348). There were fewer deals in the real estate sector but they had higher transaction values. The planned mega-deal between Vonovia and Deutsche Wohnen attracted the most attention; the now third offer is worth €19 billion (as of August 2021).
The number of deals increased slightly from 101 (second half of 2020) to 109 (first half of 2021). However, the value of all transactions increased rapidly: from 1.5 billion euros in the second half of 2020 to 6.2 billion euros in the first half of 2021. This was due to two mega real estate deals: LLC Starwood Capital Group Management acquired CA Immobilien Anlagen AG for 2.3 billion euros and Immofinanz AG acquired S IMMO AG for 1.1 billion euros (67.9 % of the transaction value of all deals in the real estate sector).
With 295 deals, there were slightly more deals in Switzerland in the first half of 2021 than in the second half of 2020 (288). Total value: 13.4 billion euros compared to 14.9 billion euros in the second half of 2020. There were two mega deals: Montes Archimedes Acquisition Corp took over the healthcare company Roivant Sciences GmbH for 5.2 billion euros, and the Speciality Ingredients division of the chemical and pharmaceutical company Lonza went to the private equity firm Cinven and Bain Capital for 3.9 billion euros.
“Despite the pandemic, an immense number of transactions are currently taking place or are planned - far more than could be explained merely by catch-up effects, after some deals were delayed in the second half of 2020. Private equity sees the pandemic as an opportunity and is seizing it - regardless of what happens next in this regard.”
This publication includes information obtained or derived from a variety of publicly available sources. PwC has not sought to establish the reliability of these sources or verified such information. PwC does not give any representation or warranty of any kind (whether express or implied) as to the accuracy or completeness of this publication. The publication is for general guidance only and does not constitute investment or any other advice. Accordingly, it is not intended to form the basis of any investment decisions and does not absolve any third party from conducting its own due diligence in order to verify its contents. Before making any decision or taking any action, you should consult a professional advisor.