The international financial crisis increasingly affects the German market for mergers and acquisitions (M&A). According to the Angermann M&A International consulting firm, it is not likely that there will be an increase in M&A activities by German small and medium-sized entities (SMEs). However, it is expected that in view of falling company prices here in Germany there will be an increase in the number of German SMEs taken over by investors in particular from Eastern Europe. Another probable reason may be the fact that several Mezzanine programmes will soon expire.
According to Angermann, from the middle of 2008 there will be an increase in those company sales which are carried out due to financing requirements. In order to avoid liquidity problems some companies will seek the support of strategic investors. One reason for this is said to be so-called Mezzanine programmes which will soon expire. In these cases subsequent financing is not always ensured or at least not at traditional conditions due to the international financial crisis. SMEs having a sound equity ratio, however, are hardly affected by this, according to the experts.
Another important development in 2008 is said to be an increase in cross-boarder mergers and acquisitions affecting German SMEs. Companies from Eastern Europe, China and India are still highly interested in the takeover of small and medium-sized German entities. According to experts, falling prices may even lead to more of such transactions. However, this development was no one-way-street. Experts claim that this may also be beneficial to acquisitions by German companies abroad.
As compared to their neighbouring countries in particular in the east, Germans are said to have quite some deficit in this respect. According to the above-mentioned Hamburg-based consulting company, the current advantageous Euro exchange rate and low interest rates made it easier for German companies with a sound equity ratio to go international.