Swiss Deals Seen Recovering In 2011,Aided By Strong Currency-Study
May 10 2011 - 1:38PM
Dow Jones News
Swiss firms are set for a spurt of activity this year after a
solid yet unspectacular first three months, helped in part by a
persistently strong Swiss franc against the U.S. dollar and euro,
according to a study released Tuesday.
While first-quarter dealmaking topped last year's quarter amid
Meyer Burger Technology AG's (MBTN.EB) EUR356.6 million play for
German solar cell maker Roth & Rau AG (R8R.XE) and Sulzer AG's
(SUN.EB) CHF858 million purchase of Cardo Flow Solutions from
Sweden's Assa Abloy AB (ASS-B.SK), quarterly comparisons are
typically skewed by major deals. Last year, Nestle SA's (NESN.VX)
$3.7 billion first-quarter acquisition of Kraft Foods Inc.'s (KFT)
frozen pizza business in North America and the food-and-beverage
giant's sale of a stake in eye-care firm Alcon to Novartis AG
(NOVN.AG) for $28.3 billion fuelled an unusually strong
reading.
"The change in mood is perceptible with corporates, who are
increasingly prepared to take cash in hand, even though so-called
megadeals are likely to remain rare--we are mainly talking about
small- and mid-sized mergers and acquisitions," KPMG's Stefan
Pfister, head of transactions and restructuring, said at a media
briefing. The study was prepared by KPMG in conjunction with the
University of St. Gallen.
The rising Swiss franc, a persistent source of worry for
Switzerland's exporters, could enable more dealmaking because Swiss
firms find their currency is worth more when translated to U.S.
dollars or euros, though there are few tangible signs thus far of
deals driven mainly by the Swiss franc's strength, KPMG said.
A "reawakening and reinvention" of the private-equity industry
is also likely to be a factor in future dealmaking, KPMG said.
"Private equity houses are now seeking homes for the often
significant funds they hold," KPMG's head of
mergers-and-acquisitions Patrik Kerler said.
Specific Swiss sectors set for M&A are real estate, where
KPMG downplayed the Swiss National Bank's repeated warnings of a
Swiss housing bubble, industrial firms, healthcare and private
banking, where smaller firms are increasingly finding themselves in
a bind between rising regulatory costs and fewer clients and
revenue due to watered-down banking secrecy.
-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043;
katharina.bart@dowjones.com