Mergers plunge to lowest level in five years

The number of mergers and takeovers in Switzerland has sunk to its lowest level in five years, according to a new study by KPMG.

The international business consultancy said on Monday there were 204 mergers or takeovers in Switzerland in the first half of 2002 – 32 per cent fewer than in the same period last year. The total volume of transactions was $7.6 billion (SFr11.3 billion), down 63 per cent on the 2001 level.

Around two thirds of the transactions involved foreign companies and almost half – in terms of volume – were in the finance and insurance sectors.

Jürg Glesti, KPMG Switzerland Corporate Finance partner, said the level of mergers and acquisitions in Switzerland was at its lowest since 1997 and was unlikely to change before the end of the year. He said that when change did come it was most likely to affect medium-sized businesses in need of restructuring.

Worldwide trend

The report said the situation in Switzerland reflected a worldwide phenomenon. In the first half of the year the volume of acquisitions and mergers worldwide fell by 56 per cent to $448 billion.

All branches of the economy were affected, the report said, but the retail, technology and information sectors showed the most marked decline.

The biggest takeover worldwide this year was the $18.67 billion merger in the United States of the two computer giants Hewlett-Packard and Compaq, the report said.

In Switzerland the biggest deal was Zurich Financial Services $1.97 billion spin-off of its Converium reinsurance company.

swissinfo