Swiss M&A in a sleepy mode? Extensive Summer break in Q3/2024?

We saw an exiting start into the new year with four billion-dollar-deals out of the top six deals 2024YTD in Q1, and with the by far largest acquisition of Vodafone Italia by Swisscom for €8 billion (see article on this profile in March) in 2024YTD. And we saw three further billion-dollar-deals in May and June, but no more until end of Q3. Only two Q3 deals made it into the top ten or even top 15 league table. However, we saw a good start of Q4 with the announcement of the second largest deal with Swiss participation year todate. It is a divestiture of Switzerland`s most active and largest institutional direct investor, Partners Group AG in Zug. On 1 Oct 2024, TPG Texas Pacific Group as lead investor through its climate investing unit TPG Rise Climate announced its joint acquisition with the Singapore sovereign fund GIC of the power metering business Techem Group for a total consideration of €6.7 bn from former lead investor Partners Group and Canadian co-investors CDPQ and Ontario Teacher’s Pension Plan.

BCG reported a decline in number of transactions by 31% for the first nine months 2024, compared to 2023. Without reviewing all reported transactions in detail (to eliminate non M&A and non Swiss transactions in the league tables) we can confirm a substantial decline in aggregated transaction value for 2024YTD. The aggregated deal value for 2023 was CHF 71.5bn, compared to CHF 108.6bn in 2022 (see our article early this year). We would need to see quite a number of multi-billion-dollar transactions over the next two months, in order to close the gap to 2023.

Exhibit 1: Top ten M&A Deals with Swiss participation 2024YTD

All top ten deals in Q1 to Q3 had a Swiss corporate buyer or a Swiss target. Three of the top four and five of the top eight Swiss M&A transactions were Swiss acquisitions abroad, buying in Italy (2x), Germany, USA and France. Deal #2, #5 and #6 were foreign corporate acquisitions, all by US investors: Sonoco Products, Johnson & Johnson and Cadence Design Systems. Deal #9 was the biggest domestic takeover, Union Bancaire Privee acquiring Societe Generale Private Banking Suisse and SocGen`s UK Private Bank Kleinwort Hambros for together EUR 900mn. Deal #10 was the largest Chinese acquisition in Switzerland, Midea Group Comp. Ltd. offered EUR 760mn for the Climate Division of Arbonia AG. Of these ten transactions we had no PE buy-outs but three PE exits to corporates, two of the three seller were US PE houses and one an UK based PE house (we included the Partners Group divestiture in Q4 into our league table above on second position, the numbering in this and the following paragraphs apply to the Q1 to Q3 / 2024 league table)

Traditionally, Swiss corporates are strong foreign buyers, including Novartis (2x) and Vitol Group. Swisscom as largest foreign buyer and Emmi AG with its EUR 900mn acquisition in France are seen less frequently as large foreign investors. However, apart from the €8bn Swisscom deal and the €6.7bn exit of Partners Group, the transaction values seen in 2024YTD were rather small, compared to previous years.

The second largest deal Q1 to Q3 was a deal between a US PE house and a US corporate buyer, the takeover of Eviosys Packaging Switzerland GmbH from KPS Capital Partners LP for $3.9bn by Sonoco Products Company. Novartis was the most active corporate buyer with three takeovers in the top 12 deals. Deal No. 3 was the €2.5bn public takeover bid for Swiss biosciences company MorphoSys, announced beginning of February. By June 20, 2024, Novartis held >91% of the share capital and MorphoSys and Novartis applied for the de-listing of the new Novartis subsidiary.

On 2 May, 2024, Novartis announced the buy-out of Mariana Oncology from Atlas Ventures and other VC investors for $1 billion plus potential earn-outs of a further $750mn. And in the first week of the year Novartis reported the takeover of Dutch Calypso Biotech BV for $425mn.

As usual, there are more deals below CHF 500 mn than above, but as BCG already explained, substantially less than in an already declining market 2023. And the aggregated deal value of these smaller transactions may not match the aggregated deal value of the top20 transactions. However, despite the political unrest in many parts of the world, including Europe, we saw another interest rate reduction by the ECB last week, we see lot′s of dry powder in PE investment funds and infrastructure funds, we see very strong IT and BioScience markets, we see a continued trend to global markets, and we see the strong corporate need for external growth on the one side and streamlining of their corporate activities on the other side. These should be good economic ingredients for a sustainable market growth.

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