The mood on international financial markets has continued to recover over the past few months. This is a finding of the latest “M&A Review” which is published on a regular basis by KPMG and the Institute of Business Administration of the University of St. Gallen (HSG). Despite political unrest in the Arab world and tragic events in Japan, which made equity and financial markets shake, the basic positive trend has remained intact. The current levels of both the American and the European stock markets are among the highest in the past two years.
M&A activity shows a strong correlation with movements on capital markets. Nevertheless, statistics from 2011 concerning the number and volume of M&A transactions show figures that still differ from those of the previous year. During the first quarter of 2011, 61 transactions were counted in Switzerland. That is a slight increase of four transactions over the first quarter of 2010.
Due to the lack of major transactions, however, the value of these transactions has remained at a modest level and reached USD 10.8 billion (Q1 2010: USD 39.9 billion). During the same period of the previous year, the statistics already showed two major transactions at this stage (the purchase of Kraft Foods’ Frozen Pizza Business by Nestlé for USD 3.7 billion, and the acquisition of Alcon (52% share) by Novartis for USD 25.8 billion). Excluding these two transactions, the resulting volume for the first quarter of 2010 is USD 10.4 billion, which would have represented a 3.8% increase in value for the first quarter of 2011.
A look at the first quarter and April 2011 reveals a return to active implementation of M&A transactions in the industrial sector, one that is particularly important to Switzerland. Two noteworthy examples are Sulzer’s acquisition of Cardo Flow Solutions and Meyer Burgers’ takeover of Roth & Rau.
Given the positive prevailing mood on capital markets, it comes as no surprise that more and more preparatory work is being done for M&A transactions in Switzerland, as well. Numerous companies have openly declared their M&A intentions. Moreover, activity among M&A consultants has also increased considerably, and large-scale transactions were already announced in April (see industry sector transaction above), which will have a positive impact on the Swiss M&A market’s second quarter. Of particular note here is also the public tender offer made by Nibe Industries AB for the Schulthess Group.
Another trend is that the Asian market is becoming increasingly important for the M&A activities of Swiss companies. Due to their growing economies and the expertise developed by local companies, mergers and acquisitions are also being used more commonly as tools for growth for Chinese, Indian, Japanese and other Asian companies. Despite the current situation within the country, Japan’s Nabtesco Group, for instance, was able to successfully conclude its acquisition of the Kaba Door Automation Division, and further strengthen its international position.
The Swiss M&A Award is presented each year to the companies with the most impressive mergers and acquisitions; this year KPMG presented the award to the following companies:
- : The company performed the most M&A transactions during the past year.
- : ABB purchased the technology company Ventyx which now makes ABB an integrated provider of company-wide technology platforms and power automation systems.
- : This young company displayed courage and a particularly clear focus on lifestyle products with its acquisition of Jet Set AG.
Every year, the Swiss M&A Award is presented by a jury made up of: Prof. Peter Gomez (Chairman of the Board of Directors of SIX Group and Dean of the Executive School of Management, Technology and Law of the University of St Gallen), Adriano Agosti (Chairman and Managing Partner von GoldenPeaks Capital Partners) and Dr Patrik Kerler (Head of M&A at KPMG Switzerland).
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