The roughly four billion euro takeover of the chemical company Borealis by OMV was the most expensive.
In the Corona year 2020, a whole series of groups with Austrian participation changed hands. Compared to the previous year, there were fewer, but larger deals, as a list by the consulting firm EY shows on Monday. The roughly four billion euro takeover of the chemical company Borealis by OMV was the most expensive.
According to the survey, the total number of transactions fell by 16 percent from 328 to 275, but the published volume of mergers and acquisitions (M&A) increased from 12.1 to 12.6 billion euros (plus 4 percent). Most of the takeovers (85) were in the industrial sector. This was followed by the technology (61) and real estate sectors (with 61 and 53 deals respectively).
At the beginning of the year, the pandemic caused “reluctance on the transaction market”, but in the second half of the year “more money was taken back into hand”. The higher volume compared to 2019 was primarily due to four megadeals, each of which exceeded 1 billion euros.
The largest transaction was the majority takeover of the chemical giant Borealis by the OMV Group with around 4 billion euros. OMV increased its share from 36 to 75 percent. The Styrian chip manufacturer ams AG took over the German Osram Licht by means of a domination and profit and loss transfer agreement for around 1.2 billion euros, Cellnex Telecom bought CK Hutchison Networks Austria GmbH for 1.1 billion euros and UNIQA-Versicherung bought the AXA subsidiaries in Poland, the Czech Republic and Slovakia by around 1 billion euros.
The second deal within Austria – alongside OMV-Borealis – was the purchase of a block of Immofinanz shares by Carpinus Holding, worth around EUR 400 million. The appetite of Austrian investors for investments abroad has decreased from 130 to 106 transactions.
“The corona pandemic is changing all areas of life and is forcing many companies to revise their business plans – a large number of transactions were stopped immediately at the beginning of the first lockdown in March 2020,” reported Eva-Maria Berchtold, partner and head of strategy. and transaction consulting (Strategy and Transactions) at EY Austria.
The focus was on stabilizing the company's own business and securing liquidity. In the second half of the year, the companies would have taken up their strategic growth and portfolio optimization plans again.
“So some transactions were still concluded before the end of the year – contrary to expectations, money was taken into hand again. Thus, despite the pandemic, 2020 was a good year for transactions,” summarized Berchtold.
This year will generally be characterized by an increasing number of distressed sales as a result of financial difficulties or restructuring, the management consultancy expects.
As in previous crises, the effects on companies and economic sectors are very different. While some sectors benefited from the abruptly changed situation and part of the economy continued to work unaffected, other sectors, such as the tourism and catering sector, were hit hard.
“The expiry of public support programs and deferrals will reveal this existing imbalance – in addition, some companies will plan disinvestments in order to create liquidity”, says Bettina Rosar, partner and head of Turnaround Restructuring & Strategy at EY Austria. “As early as the end of 2020, there was a clear noticeable increase in the interest of buyers in 'distressed' situations.”
For the present analysis, EY examined all published transactions with Austrian majority and minority interests.
