ZEW-ZEPHYR M&A Index Germany - Upward Trend of Mergers and Acquisitions Suffers Setback

The increase of mergers and acquisitions (M&A) during the last four years in Germany seems to have stopped. Growth continued in autumn 2014, but the decreasing M&A activities at the end of the year have now put a notable damper on this trend. The ZEW-ZEPHYR M&A Index has dropped accordingly. This is the result of the researches by the Centre for European Economic Research (ZEW) based on the Zephyr database of Bureau van Dijk (BvD).

Following a slight increase from 96 index points in August 2014 to 99 points in October 2014, the ZEW-ZEPHYR M&A Index in November and December dropped to a level below the 60-points mark for the first time since August 2013. The twelve-month average of the ZEW-ZEPHYR M&A Index reflects this development. In October 2014, the index had just climbed to a four-year high of 91 points. Then, in January 2015, it rushed to 84 index points. This value was the same in August 2014.

Nevertheless, several important deals have been made since August 2014. The acquisition of the Consumer Care division of the U.S. pharmaceutical group Merck & Co. by Bayer, which is worth EUR 11.3 billion, is dwarfing all other deals. This takeover has been the greatest deal with German participation since Continental AG paid EUR 11.4 billion for the automotive supplier VDO in a horizontal acquisition. VDO is a Siemens supplier.

It is still unclear whether the recent decrease is only temporary. In January 2015, the ZEW-ZEPHYR M&A Index indeed recovered significantly and reached a total of 90 index points. But January usually is the strongest month for M&A activities, so the value should be interpreted with care, especially since during the past ten years only January 2011 was below the current index value (79 index points in January 2011). At the same time, however, rumours about pending deals let hope for a soon recovery of investment activities with German participation.

Information about the ZEW-ZEPHYR M&A Index

The ZEW-ZEPHYR M&A Index measures the number of M&A transactions completed in Germany each month. It only considers mergers and acquisitions by and with German companies. There is no differentiation with respect to the country of origin of acquirers or partners involved. Hence, German as well as foreign acquiring companies are taken into account, while all the target companies considered are active in Germany. The ZEW-ZEPHYR M&A Index Germany is created by ZEW and Bureau van Dijk (BvD) on the basis of the ZEPHYR data base. ZEPHYR provides information on more than a million M&As, IPOs and private equity transactions worldwide.

For further information please contact

Sven Heim, Phone 49 (0)621/1235-183, e-Mail heim@zew.de