(Bloomberg) — Switzerland is seeing a more than fivefold surge in mergers and acquisitions that’s outpaced most of its European peers, giving bankers hopes for a lucrative payout this year.
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The volume of takeovers targeting Swiss companies has jumped 465% to $16.7 billion so far this year, according to data compiled by Bloomberg. Private equity firms are particularly active, with Advent announcing late Sunday it has agreed to acquire Zurich-listed chipmaker U-blox Holding AG in a deal valued at 1.05 billion Swiss francs ($1.3 billion).
Switzerland’s wave of dealmaking comes against a backdrop of macroeconomic challenges. Swiss companies are now facing a potential hit to revenues after the US unexpectedly imposed a 39% tariff on imports from the country. The levy is the highest in the developed world and prompted various Swiss companies from small to large to look at ways to lower the impact.
The country’s openness to foreign investment has helped drive inbound deal volume, as it doesn’t have the restrictions that some other European nations have, according to Tino Gaberthüel, who heads the corporate and M&A practice at Zurich-based law firm Lenz & Staehelin.
In April, Helvetia Holding AG agreed to combine with Baloise Holding AG to form Switzerland’s second-largest insurance group
“There is a high interest in Switzerland’s mid-cap players that run cost efficiently, but may not have a globally critical size,” said Vincent Thiebaud, head of Swiss investment banking at Jefferies Financial Group Inc.
Swiss firms themselves are also on the lookout for new technologies and for entering new markets or cementing their footprint in existing ones, said Reinout Boettcher, JPMorgan Chase & Co.’s head of Switzerland investment banking.
“The Swiss M&A market has historically been strongly influenced by outbound activities, also because Switzerland has a large number of leading global companies that want to strengthen their positions,” Boettcher said.
Mergers of domestic companies, on the back of a strong Swiss franc and the needs to boost returns, are also driving Swiss dealmaking. In April, Helvetia Holding AG agreed to combine with Baloise Holding AG to form the country’s second-largest insurance group, marking the biggest announced deal in Switzerland this year. OC Oerlikon Corp. in May signed a deal to sell its Barmag textile machinery business to domestic rival Rieter Holding AG.
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