How corona stress drives mergers in German corporations

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Corona-damaged companies have to sell lines to fix their balance sheets. That is what drives the takeover business in Germany – those involved hope.

UCorporations facing financial pressures are driving the business with mergers and acquisitions. Especially when Corona has put companies in additional distress, they see themselves prompted to sell divisions – at least that’s what experts from the mergers & acquisitions (M&A) industry say. On the buyer side, there is not only competition from industry, but also private equity with its bulging pots of money. That should boost the M&A business in the coming year, according to the forecast of the experts, which is always hope because their fees are linked to the success of transactions.

“The effects of Covid-19 will make active portfolio management indispensable for companies,” says the investment bank Goldman Sachs, analyzing the merger in Europe, Africa and the Middle East (Emea). As her co-boss for M&A business in Germany and Austria, Tibor Kossa, says, around 60 percent of the volume has fallen to such divestments in the year to date – as spin-offs or as transactions between companies. “A trend that will intensify this is the massive drifting apart in the performance of individual companies – even within sectors.”


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