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Swiss corporate merger activity dampened by Covid

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M&A activity for the year as a whole was most intense in the TMT (technology, media and telecommunications) sector Keystone / Obs/caritas Schweiz / Caritas Su

The coronavirus pandemic left its mark on mergers and acquisitions (M&A) in Switzerland last year. The volume of transactions halved, and the number of deals was also down.

Overall, the number of transactions with Swiss participation fell from 402 to 363. At $63.1 billion (CHF56 billion), the transaction volume was only half what it was in 2019 – mainly owing to the absence of mega-deals, consultants KPMG said on Thursday.

In the second quarter in particular the M&A market suffered a severe slump. Only 74 transactions were completed, the lowest number since the beginning of 2017, while the transaction volume of $7.1 billion was the lowest quarterly figure since the end of 2015.

M&A activity for the year as a whole was most intense in the TMT (technology, media and telecommunications) sector. In 2020 more than a fifth of all transactions and more than a third of the transaction volume were attributable to this sector. The two largest deals were also completed in this sector (the purchase of Sunrise by Liberty Global and the merger of CPA Global with Clarivate Analytics).

Swiss companies also acquired significantly more foreign companies last year than the other way around. In 154 cases (42% of transactions) foreign companies were acquired by Swiss companies and in 84 cases (23%) Swiss companies were acquired by foreign companies.

For 2021 KPMG expects a “moderate” development in the M&A market, predicting momentum to increase in the e-commerce sector in particular.

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