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German M&A report

DAX/MDAX global M&A survey

10 years of German deals

Even set against the unexpected upheavals of the past few years, 2022 was remarkable. It's also the year that bookends Freshfields' latest survey of the most recent decade of M&A activity by the 90 largest listed companies in Germany – plus the trends likely to shape the transactional landscape going forward.

2022 has seen widespread and unexpected global economic upheaval, which in turn has affected the M&A market. After recent record years, both the volume and the value of global transactions declined: in the past year value was $3.855trn, down 34 per cent from 2021. The trend is mirrored by the 90 leading German companies that are listed in the DAX and the MDAX.

Prior to 2022, the number of M&A deals for both the DAX and MDAX groups of companies was on an upward trend, but in 2022 the total was down 11.2 per cent year-on-year. The number also declined sharply between H1 and H2 of 2022, from 235 to 144 (down 39 per cent). The reason for this is mainly a dampened M&A climate following the war in Ukraine and the knock-on effects such as rising energy costs, inflation and interest rates.

“M&A activity among the DAX and MDAX companies was still fairly strong in 2022 despite the global transactional landscape being down significantly and despite the ‘polycrisis’ of war in Ukraine, higher interest rates, rising inflation and other dampening factors,” says Lars Meyer, M&A partner at Freshfields and among the authors of the study. “Moreover, 2021 was a year in which the investment backlog from the coronavirus-affected year of 2020 was released again. This made the year artificially stronger and limits the comparison with 2022.”

Additionally, a higher degree of scrutiny applied by antitrust and other regulators worldwide has led to an unprecedentedly high number of transactions being prohibited, abandoned or reversed, Freshfields Antitrust Partner Uta Itzen explains: “This was primarily due to national security concerns, but aspects like sustainability and access to essential products also play an increasingly important role in regulators‘ decision-making. Ultimately, this is part of de-globalisation and we expect the trend to continue in 2023.” Itzen also co-authored the Freshfields study ACT 10 Key Themes: Global Antitrust in 2023.

As we explain in our Outlook section, ESG is continuing to become a strong driver of M&A as companies are looking to secure clean energy or waste management technologies.

The report also underlines the importance of digital transformation as a driver of transactional activity by the leading German companies and of their focus on the US.