Report "M&A transactions of German family-owned companies 2016"

International expansion through strategic company acquisitions

The trend towards the global expansion of German family-owned companies via strategic company acquisitions remains unbroken. Despite increasingly intense competition to find appropriate targets, companies are continuing to expand their global presence, open up new markets and gain expertise and customers through acquisitions.

In this process, German companies firstly take a look at the domestic market. Outside Germany the USA continues to be the number 1 target country for acquisitions. After the USA, the land of opportunity, Poland and also the countries of central and eastern Europe have become more attractive for acquisitions. Italy also remains attractive for investors. Interest in Asia and China, on the other hand, has gone down noticeably. The same is true for France, where difficult economic conditions hinder the environment for investments.

The number of transactions in the automotive and mechanical engineering sectors are running neck and neck with those in the services sector. After a slowdown in recent years, renewable energy has gained ground to once again attract a high number of investors.

In this study, for the fourth consecutive time, Rödl & Partner surveyed company customers and M&A consultants of banks and financial institutions around the world on the M&A activities of German family-owned companies in the domestic and international markets. Our objective was to determine the motives and approach of companies in the course of their strategic expansion and to record current market trends.

In the current year, experts once again predict an unchanging high level of company acquisitions, with almost a quarter of those surveyed assuming a further increase. As shown by our parallel survey of investment companies specialised in dealing with German medium-sized companies, family-owned companies have to face considerable competitive pressure in their quest for the acquisition of growth-driven, innovative companies. This is because private equity firms are also very attracted to German medium-sized companies, and there is no shortage of investment capital. The same is true for strategic investors from Asia and increasingly also from the USA wishing to penetrate the European and especially the German market. This is causing the existing high prices to spiral and therefore reduce the opportunities to successfully conclude acquisitions.

We would like to thank all the experts from the banks and financial institutions who have made this survey possible by their participation. We wish you interesting reading.