Private equity to play a greater role in German M&A


Private equity is set to play a greater role in the M&A activities of German DAX 100 companies according to 75 per cent of M&A heads surveyed in a new study by 3i, Deloitte & Touche and Linklaters.

The growing reluctance of banks to finance transactions, which is likely to be exacerbated by the pending implementation of the Basel II rules, means that German companies will increasingly be forced to turn to private equity to address their financing needs.

The private equity industry has traditionally been regarded with a sense of suspicion in Germany. Almost 40 per cent of survey respondents felt that private equity firms were likely to try and renegotiate contracts shortly before closing. The report concludes that German companies feel driven to deal with private equity firms through necessity rather than choice.

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