GERMANY Trends and Developments Contributed by: Carsten Berrar and Peter Klormann, Sullivan & Cromwell LLP
ThyssenKrupp. These cases show that share - holder activism has found an established place in the German corporate landscape and will likely continue to influence M&A in the future. Private equity developments Private equity funds were particularly affected by the sharp increase in interest rates and result - ing restrictions on debt financing over the past years, but 2024 was a year of recovery for many. The ECB lowered the base rate four times in 2024 and once again in January 2025. In 2024, private equity firms executed several high-profile deals in Germany, with half of the year’s top ten deals involving private equity investments. Notable examples include KKR’s take-privates of German renewable energy com - pany Encavis and space and technology com - pany OHB, and KPS Capital Partners’ acquisi - tion of Innomotics, a carve-out from Siemens. Furthermore, CDPQ and TPG Capital joined forces to purchase Aareon from Aareal Bank and Advent International, and EQT invested in bus and train operator Flix. Private equity funds were estimated to hold well above USD2 trillion globally at the end of 2024, so continue to hold record amounts of available capital ( “dry powder” ) accumulated in the past and continue to face high investment pressure. At the same time, many investors (LPs) in funds with more recent vintage years have not yet seen any distributions. Therefore, there is a strong demand to generate returns through the sale of portfolio companies. As a result, continuation funds – whereby assets from historical funds are sold or transferred to newly established funds operated by the same fund manager – have become an even more prominent topic in 2024.
Exit processes, IPOs and de-SPAC transactions
Exit processes for financial investors remained challenging in 2024. Despite the German stock indices reaching record levels, the German IPO market still faces considerable uncertainties, and many IPOs were postponed. The largest IPO of the year was of perfume retailer Douglas, led by its private equity owner CVC, and had a difficult start in the market. A more successful counter-example was the second-largest trans - action, the IPO of academic research publisher Springer Nature (invested by BC Partners). The sale of Aareon by Advent and Aareal Bank was an example for a successful exit through M&A. In 2025, Apollo and other investors also opted for an M&A exit for Oldenburgische Landes - bank, abandoning earlier IPO plans. Other sig - nificant processes are still pending, such as the exit preparations for pharmaceutical company STADA by Bain and Cinven. While the boom of SPAC and de-SPAC trans - actions is certainly over, these structures have found an established place in the market and can still be valuable tools in certain cases. In 2024, one German de-SPAC transaction was completed (SMG SPAC with 3D printing com - pany BigRep). Venture capital market Following another sharp decline in venture cap - ital financing for German start-ups, valuations and exit transactions in 2023, there were signs in 2024 that the worst period may be over. In total, more than EUR7 billion was invested in German start-ups in 2024, maintaining the pre - vious year’s deal volume, according to reports. The number of German start-ups that went into insolvency in 2024 also remained at the previous year’s high level, but did not increase further. As a result, and taking into account the improved
744 CHAMBERS.COM
Powered by FlippingBook