The banker sees a wave of acquisitions towards Switzerland

After a decline in the current year, the US investment bank JP Morgan expects many more acquisitions of companies in Switzerland in 2021.

“At the end of the year, it rarely happened as much as now,” Swiss chief Nick Bossart said in an interview published Tuesday with the Reuters news agency. “We expect a strong increase in M&A volumes in Switzerland in 2021.”

Several companies are working on agreements with those who want to put their business on a new basis. “Smaller, but also very large, companies are driving such transformative transactions. There are hardly any industries in which nothing works. ”JP Morgan is a top consultant in the business.

The coronavirus crisis caused many M&A projects to come to an abrupt halt from mid-March to early May, the banker said. According to data provider Dealogic, the number of acquisitions with Swiss participation fell to 401 from 522 the year before at the end of November. Because there were no major transactions, the volume dropped by more than 60 percent.

“In the meantime, activity has picked up,” Bossart said. The uncertainty factors have faded into the background. Thanks to vaccines, you can see the light at the end of the Covid tunnel. However, cost pressure is likely to increase for many companies. They could take countermeasures with mergers in their local market. However, with Covid-19, the importance of digitization has exploded. “A lot of companies will have to get stronger here,” Bossart said.

SPACS also targets Switzerland

The difference in valuation between fast-growing companies and fairly stagnant companies was rarely as great as it is today. “That will give a boost to the M&A market. Those who don’t grow enough from the existing business buy. “Ultimately, many potential buyers, such as private equity firms, would have war chests full. In addition, there are so-called SPACs (Special Purpose Acquisition Vehicles). They raise money with an initial public offering and only then do they look for a company they can buy with the proceeds. In the US, the empty company coat business is booming. For example, the men’s magazine “Playboy” wants to go back on the stock market by the back door.

The US SPACs had already sought targets in their own market, Bossart explained. “These spacers are also looking for destinations in Switzerland.” Divisions that want to sell large companies are of possible interest. At the same time, the banks examined together with the entrepreneurs to bring themselves a SPAC to the Swiss stock exchange. “That is on the agenda of many for 2021.” There are technical obstacles. A company that wants to join SIX must present financial figures for the last three years. A SPAC could not do that. “But I suppose solutions will be found.”

return to homepage