GERMANY Trends and Developments Contributed by: Carsten Berrar, Peter Klormann and Lea Detambel, Sullivan & Cromwell LLP
increase compared to 2024, according to reports. In Germany, 30 public campaigns were recorded, up from 18 in the previous year. The landscape was further intensified by an increasing number of first- time US activists targeting European companies. At the same time, as activity has increased, companies have become more versed and proactive in preparing for potential campaigns. Notable activism cases in Germany in 2025 included Elliott’s campaign at RWE advocating an expanded share buyback programme, and renewed pressure on Delivery Hero by several investors, including Sachem Head, to explore strategic options. Active Ownership Capital remained particularly active, requesting gov - ernance changes at HelloFresh and cost measures at Gerresheimer. In some of these cases, the listed com - pany entered into a tailored formal agreement with the Private equity (PE) funds were particularly affected by the sharp rise in interest rates and the resulting restric - tions on debt financing in previous years. In 2025, monetary conditions further eased on both sides of the Atlantic: the ECB lowered its base rate to 2.0%, while the US Federal Reserve began a gradual easing cycle in the second half of the year. As a consequence, PE activity remained resilient in 2025 and trended higher overall, although deal vol - umes were broadly in line with the previous year. US private equity firms were particularly active, with finan - cial investors surpassing strategic buyers for the first time in German transactions involving foreign inves - tors. PE funds were estimated to hold around USD2 trillion in undeployed capital as of late 2025, maintain - ing significant pressure to deploy capital. At the same time, exit markets have not fully normalised, and many limited partners continue to await distributions, which has increased the focus on realisations. Continuation funds have therefore become an established feature of the German and European private equity landscape. Sovereign wealth funds (SWFs) also remained sig - nificant contributors to global M&A activity, backing global transactions totalling approximately USD184 billion in 2025. In Germany, BASF’s sale of a majority activist to address the situation. Private equity developments
stake in its automotive and surface coatings business to Carlyle and Qatar Investment Authority (QIA) for approximately EUR5.8 billion illustrated the continued relevance of additional state-backed capital in large- scale transactions. This example also illustrates that PE firms remain key acquirers of strategically disposed assets. However, the PE market no longer exhibits the steady deal flow and continuously rising valuations that characterised the earlier years of the 2020s. Exit processes and IPOs Exit processes for financial investors remained chal - lenging in 2025. While global IPO activity in terms of deal count remained broadly in line with the previ - ous year, overall issuance volume increased by more than 30%, indicating a selective but receptive market environment. In Germany, however, the IPO market remained muted amid continued uncertainty. Although eight new listings were recorded, only three included an offering component. Prosthetics and orthotics company Ottobock was the only German company to achieve a Prime Standard listing in 2025 through a public offering, whereas AUMOVIO and ThyssenKrupp Marine Systems (TKMS) entered the Prime Standard as spin-offs without a direct share placement. Other contemplated listings have been further delayed. The muted German IPO market has been attributed to continued investor caution and economic uncertainty, with many companies opting for dual-track process - es and ultimately favouring M&A over a public listing. Nevertheless, early signs of recovery emerged, with listings such as Pfisterer and Ottobock suggesting that the IPO window may gradually reopen. Look - ing ahead, the outlook for 2026 appears cautiously optimistic, with market observers pointing to a robust pipeline of up to ten potential German IPO candidates. Venture capital market Following the sharp decline in venture capital (VC) financing, valuations and exits in previous years, 2025 showed certain signs of stabilisation. More than EUR7 billion was invested in German start-ups, broadly in line with 2024, although the number of financing rounds further declined slightly. At the same time, the number of active investors decreased, as limited exit opportunities constrained distributions and made fun - draising more difficult, with fundraising activity report -
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