Swiss company takeovers on the rise after Covid-19 freeze

Lonza's $4.7 billion sale of its Specialty Ingredients business is one of the largest M&A deals so far this year involving a Swiss entity. Copyright 2020 The Associated Press. All Rights Reserved.

Merger and acquisition (M&A) activity involving Swiss companies leapt 70% in the first half of the year, demonstrating that business is returning to normal after the Covid-19 pandemic.

Consultancy firm KPMG reports that 256 deals were struck in the first six months of 2021, compared with 150 takeovers and mergers posted in the same period in 2020. The value of these deals rose to $61.3 billion (CHF56.5 billion) from $23.8 billion in the first half of last year.

“Companies resumed the transactions they had put on ice due to the coronavirus pandemic, leading to a sharp rise in deal activity. Their confidence boost, which is also reflected in the stock exchange trend, and the favourable environment for financing also fuelled the acquisition business,” Timo Knak, Head of Deal Advisory and M&A at KPMG Switzerland, said on WednesdayExternal link.

The average number of Swiss deals in a six-month period stands at 192 over the past ten years. In the past decade, only the 269 transactions recorded in the second half of 2018 topped this year’s number of takeovers and mergers.

M&A activity was most concentrated in the technology, industrial and pharmaceutical sectors. There was a marked increase in the number of foreign buyers of Swiss companies compared with last year.

“I expect deal activity to continue at a high level in the coming months, especially in industries that benefit from the changes caused by the pandemic in the long term,” Knak said.