Holding companies have invested more money in German firms in the first half of 2018 than at any other point over the past ten years. The total value of successful company acquisitions climbed to 10.7 billion Euro in the first half of 2018 - the highest value in such a time period since the 2008 global financial crisis.
Compared to the first half of 2017, the value of these transactions even doubled, according to an analysis recently published by the consultancy EY. Back then, the total value of these transactions amounted to 5.3 billion Euro. The number of transactions remained almost essentially the same this year at 96.
Shareholder investors, or private equity firms, get on board with companies in order to trim them to a return on investment and subsequently sell them for a profit. They usually exit firms after five or more years via an initial public offering (IPO) or by selling them to other financial investors. Companies are sitting on record amounts of still uninvested cash following years of easy money policies introduced by the world’s major central banks.
Financial investors are continuing to look further for attractive targets due to the low interest rate environment, said EY partner Michael Kunz.
"Still, the number of potential targets is limited," he said. "Financial investors are therefore digging deep into their pockets, especially for profitable takeover candidates that also promise growth for the future."
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