Germany’s PE Deal Value Totals $69.4 Billion in 2024

Germany’s Private Equity industry has witnessed a surge in the fourth quarter of this year with the annual deal value totalling $69.4 billion so far, 36% more than full-year 2023, despite a shrinking economy and uncertain political landscape.

According to data from Pitchbook, the leading resource for comprehensive data, research, and insights spanning the global capital markets, the deal value has reached a decade-high of $29.32 billion thanks to a handful of bigger deals. With another month left, it’s already nearly double Q2’s $16.33 billion.

However, the increase in investment is spread between fewer transactions. Deal count is only at 60% of Q2’s level, with 100 transactions in Q4. This is the third consecutive quarter where the deal count has decreased.

The two biggest deals this year in Germany which took place on this quarter is the Abu Dhabi National Oil Company (ADNOC) acquiring German specialty chemical producer Covestro through a $15.39 billion leveraged buyout. On the same day, TPG and GIC agreed to buy real estate energy billing and management services provider Techem for $7.02 billion.

PE Deals in 2024

In fact, PE deals in the first six months of the year recorded an impressive growth, on the lines of the general Europe, Middle East and Africa (EMEA) deal trend toward fewer but larger deals.

A subsidiary of leading global investment firm KKR has announced takeover of the Hamburg-headquartered Encavis for $4.4 billion in March this year, which is said to be the largest deal in the energy sector in Germany so far this year.

Even the US-based KPS Capital Partners entered into an agreement with Siemen’s Innomtics business for $3.66 billion while Bain and Cinven are looking for prospective buyers to acquire their stake in Germany’s pharma major Stada Arzneimittel AG, which is valued around $11.52 billion, for more than a year.

DSV, Denmark’s logistics service provider, has signed an agreement to acquire DB Schenker from Deutsche Bahn for $14.97 billion at enterprise value of $15.01 billion.

Germany’s federal government also planned to acquire the country’s electricity grid business of TenneT for $26.16 billion but it eventually backed out due to concerns raised about financing the purchase price.

What makes the PE deals in Germany an attractive proposition for investors is the lowering interest rates, investments by private offices and the government acting as “co-investors” in some of them.

Germany’s small and medium-sized enterprises (also known as The Mittelstand), which is heart of German economy providing employment to 60% of all workers, provides large scale opportunities to investors.