Takeovers in Germany popular but expensive
A 2018 survey by the CMS and Finance M&A panel has revealed shifting trends in Germany’s mergers and acquisitions market. While companies remain eager to grow through deals, reliance on external advisers is declining. At the same time, purchase prices have soared to record levels, raising questions about the future of the M&A boom.
The survey gathered responses from corporate buyers, private equity investors, in-house M&A teams, law firms and investment banks. It found that fewer than half of all transactions now involve external M&A advisers. In fact, 41% of firms reported using consultants for no more than one in four deals.
Organic growth remains the strongest driver for acquisitions, scoring an all-time high of 8.59 out of 10. Companies are also focusing more on expanding in familiar markets, with this strategy now rated at 6.88—up roughly four percent from the previous survey. Over three-quarters of corporate M&A departments plan further acquisitions, mostly in sectors where they already operate. The competition for attractive targets has pushed valuations to unprecedented heights. Corporate executives rated price developments at 7.95, the highest since the survey began in 2011. Despite this, German firms continue to dominate the market, making more acquisitions than divestments. Yet there are signs the M&A boom may be slowing. Advisers rated the likelihood of improved deal conditions over the next year at just 4.74. On the other hand, regulatory hurdles appear less concerning, with M&A leaders scoring the risk of objections at only 3.35.
The findings suggest a market in transition. While German companies still lead in dealmaking, rising prices and reduced reliance on advisers point to a more cautious approach. With most firms targeting known markets, the focus now appears to be on strategic, lower-risk expansion rather than aggressive growth.
