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Swiss SMEs Are Sought-After Acquisition Targets Among Foreign Companies

Swiss small and medium-sized enterprises (SMEs) are coveted abroad. Forty of them could already be sold in the first half of 2018. Compared with 2018, this means a 38% increase. By contrast, Swiss SMEs bought up less. This is shown by Deloitte’s study titled Swiss SMEs: M&A activity in H1 2018, which reviews the mergers and acquisitions undertaken by Swiss small and medium-sized enterprises.

Europe as the Most Popular Market

Swiss small and medium-sized enterprises continue to be very attractive acquisition targets. In the first half of 2018, there were 100 transactions in which Swiss SMEs participated, which represents a 6.4% increase as compared with last year. Mergers usually involve foreign partners because 71 out of 100 were cross-border transactions. Industry was most active: 22% of the transactions were made in this sector. It was followed by services with 16% and consumer goods with 14% as well as technology, media and telecommunications with 11% of the transactions.

Altogether, it was 40 Swiss small and medium-sized enterprises that were taken over by foreign companies. The acquisitions are distributed across five cantons. The majority of 15 come from Zurich, the remaining ones are scattered across Zug, Waadt, Bern und Geneva. If you compare the figures with those of the previous year, it will turn out that 38% more Swiss SMEs were sold to companies abroad. The majority of them found their buyers in Europe: nine companies were taken over by German companies, and three of them by French and three by UK companies. Six small and medium-sized businesses were sold to US companies and two of them to Chinese ones.

By contrast, in the first half of 2018 Swiss companies took over less companies that in the previous year. The number of acquisitions shrunk from 65 to 60. Thirty-one foreign companies were taken over, of which 24 in Europe. With 11 acquisitions, Germany comes first here too.

Cautious Optimism About the Future

Considering how good global economic developments are, CFOs seem optimistic about the economic cycle and business outlook. Political uncertainties abroad, however, such as Brexit negotiations or the US trade wars with Europe and China, mar the prospects a little, therefore the second half of 2018 should be expected with cautious optimism.

Source: Deloitte, Swiss SMEs: M&A activity in H1 2018

 

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