Foreign takeovers of UK-listed companies have given rise to much hand-wringing in the City of London. The phenomenon is now spreading to the continent. “Deutschland im Ausverkauf” is the phrase used to describe this by some observers. Germany, it would appear, is on sale.
Deal volumes are inherently lumpy. But the numbers show a trend. So far this year, international companies have been on a $47.2bn German shopping spree, according to Tim Winkel of 7Square. That’s nearly 70 per cent higher than the value of inbound M&A in the whole of 2020. It includes high profile megadeals such as Adnoc’s bid for chemicals company Covestro and Danish group DVS’s swoop on Deutsche Bahn’s logistics business — together worth about $32bn. Concerns will not have been assuaged by would-be suitors stepping into more sensitive sectors such as banking. UniCredit’s frenemy hug on Commerzbank, which has raised politicians’ hackles, is not counted in the numbers.
Adding to concerns, German companies are not out and about doing some shopping of their own. The volume of outbound M&A has dropped to $11bn — down two-thirds since full-year 2020. The paucity of domestic private equity funds is part of the reason why. Financial buyers, meanwhile, accounted for over a quarter of inbound M&A in 2024.