SWITZERLAND Trends and Developments Contributed by: Beda Kaufmann and Alexander von Jeinsen, Advestra
Market Activity After overall deal volume for M&A transactions in Swit - zerland significantly dropped in 2023 and total deal value even came in at the second lowest amount of the last decade, 2024 saw a moderate uptick in activ - ity year-on-year. The same is true for private equity dealmaking. Private equity investors were involved in 27% of all deals with a Swiss angle in 2024, including the year’s largest by value in the form of EQT’s IPO of Galderma. The most active industries for private equity deals in Switzerland were industrial markets and technology, media & telecommunications (TMT), followed by pharmaceuticals & life sciences (all per KPMG’s Clarity on M&A 2024). Another of last year’s top five transactions by value, the sale of Techem to TPG and GIC by a consortium led by Partners Group, did not go through as envisaged after the buyers reportedly withdrew their European competition filing. From a deal count perspective, the Swiss market is driven to a large extent by transactions in the lower and middle markets. In this segment, private equity dealmaking picked up in 2024 compared to 2023, according to Deloitte’s 2025 study on M&A activity of Swiss small and medium-sized enterprises (SMEs), driven in part by a larger number of bolt-on acqui - sitions. The study also shows that even in the SME space, Swiss private equity deals are more often than not a cross-border affair, which highlights the attrac - tiveness of Swiss targets to inbound private equity buyers in spite of the strong Swiss franc. Germany was once again the most active jurisdiction in 2024 for Swiss deals in this segment. That is mainly due to German private equity firms making acquisitions in Switzerland. However, it is also impacted by the fact that a substantive number of international private equity houses cover the Swiss market with investment teams operating out of Germany as they do not have investment teams in Switzerland. In Switzerland, small and mid-cap transactions are often financed by Swiss banks. For larger transac - tions, private equity sponsors typically need to tap the international debt markets, where private credit providers have been seen stepping in more frequently in recent times. The continuing rise of this asset class has been important for the private equity sector not only as a source of debt financing; it has also been
a way for investment houses to expand the scope of their activities by growing their own private credit arms in parallel to their traditional buyout funds. The increased cost of financing has been a major top - ic for private equity dealmaking in the last few years, as potential buyers of assets were looking at very dif - ferent deal economics than the sellers of those assets were looking at when they acquired them. This has contributed to valuation gaps between bidders and sellers and made exits more challenging. In late 2024 and 2025, we have started to see interest rates com - ing down again both in Switzerland and internationally, which has certainly fuelled the upward trend in market activity. In its most recent move in June 2025, the Swiss National Bank lowered its interest rate back to 0% for the first time since the end of 2022, citing sub - siding inflationary pressure and a weakening global economic outlook. An ongoing topic in 2024 and early 2025 was the increased requirements of the Swiss federal tax authorities for foreign private equity acquisitions. In many deals, private equity sponsors need to seek tax treaty eligibility for their acquisition structures for a reduced or zero-rate withholding tax on dividends paid by the Swiss target. This can be especially impor - tant to facilitate debt servicing in the non-Swiss acqui - sition structure (often driven by the so-called Swiss 10/20 non-bank rules) and to channel excess cash from Swiss group entities to more effective purposes. These increased requirements, especially for deals with a Benelux angle, include elevated substance standards and functions performed in the acquisi - tion structure. It remains to be seen whether this will impact the level of deal activity in Switzerland or valu - ations for Swiss targets. Trends In the past months, we have seen two trends shap - ing private equity deal activity. Firstly, there are still fewer fully-fledged auctions in the Swiss market than in recent years, as potential sellers appear to be gaug - ing the right time to bring their assets to market. For sought-after assets, however, auctions remain a pop - ular exit strategy, and bidders are still willing to offer seller-friendly terms in order to secure the deal. Par - ticularly, in the first half of 2025, we have seen a num -
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