Glencore and Shelf Drilling conducted the two biggest transactions of the third quarter. Glencore invested USD 1.4 billion to boost its stake in Kazzinc, a zinc producer in Kazakhstan, by 18.91% to 69.61%. Arab Shelf Drilling International Holding bought 38 drilling rigs from Transocean for just over USD 1 billion. Four of the ten largest deals conducted in Q3 can be attributed to the commodities industry. This illustrates both the momentum of transaction activities in this sector
as well as the position and significance of the commodities industry in Switzerland.
One of the most closely-followed deals in the financial sector was the purchase of Bank of America Merrill Lynch’s “International Wealth Management” business based outside the US and Japan by Bank Julius Baer (see table). Apart from this transaction, only a few isolated deals involving financial service providers were observed in the past few months. These frequently consisted of the sale of client portfolios. Whether this can be considered to be the beginning of the anticipated wave of consolidation remains to be seen, however. The real estate transaction between Credit Suisse and Axa Winterthur as well as Glencore’s stake in Shelf Drilling show that the proportion of trade in assets and minority transactions is not just growing in the financial sector. It could be interpreted as a sign of greater caution among buyers or as sellers’ efforts to fine-tune their focus.
Experience has shown that the fourth quarter brings high volumes and that considerably more deals are announced during this period of time than the third quarter. It can be assumed that some companies will want to wrap up any ongoing transaction processes prior to the end of the year as well as any strategic transactions currently being prepared. In an international comparison, Swiss companies are expected to engage in an above-average level of acquisition activities since these continue to remain on solid footing and have the necessary resources available. Special attention should be paid to Swiss companies’ transactions in the USA where further increases can be expected. Along with the upturn in the situation on the Dow Jones which began in early June, expectations of America’s economy have also been on the rise – a positive indicator of M&A activities on the North American market.