The merger "virus" continued to hit Switzerland last year, with companies using a record amount of money to put the mergers into place, according to the Zurich weekly "Handelszeitung" newspaper.This content was published on January 5, 2000 - 14:41
The merger "virus" continued to hit Switzerland last year, with companies using a record amount of money to put the mergers into place, according to the Zurich weekly "Handelszeitung" newspaper.
In its first issue of the year, the newspaper reports that there were 343 mergers involving Swiss firms last year, 12 less than in 1998. Four out of ten mergers were between Swiss companies.
At the beginning of the 1990s, the average annual number of company marriages went as high as 440. While the number has come down, the sums of money being used to make the mergers reality have soared to "astronomical" heights, the paper says.
Three deals alone accounted for Sfr5 billion:
* The take-over of the American employment firm, Olsten, by its Swiss competitor, Adecco
* Swisscom's purchase of the German mobile telephone operator, Debitel
* SAirGroup's acquisition of the US catering company, Dobbs
One deal went practically unnoticed by the public, added the Handelszeitung. The Swiss Emil Frey group bought the world's largest agent of the Ford motor company, the Schwabengarage in Stuttgart, Germany. The deal made the group the number one car seller in Switzerland, pushing rival Amag into second place.
There is a reverse side to the merger coin, comments "Handelszeitung" editor in chief, Kurt Speck. "If Swiss newspaper headlines are anything to go by, half of the Swiss economy was sold off."
He is referring to the emotions aroused among the Swiss with the announcements that some traditional Swiss firms were passing into foreign control. The sale of shoe manufacturer Bally to the US Texas Pacific Group, and the acquisition of watch producers TAG Heuer, Ebel and Zenith by the French Louis Vuitton Moët Hennessy group all hit the headlines last year.
However, Speck warned that not all mergers end happily, "Whoever swallows a lot, can also be prey to being swallowed easily in turn. That also hold true for the year 2000."
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