Corporate carve-outs increasing in prominence across Europe
April 11, 2019

Corporate divestment activity of European assets is projected to increase for the fourth year running, according the findings of the AURELIUS Equity Opportunities annual corporate carve-out survey, with shareholder activism expected to contribute to the rise in activity. 

The survey, which canvassed the opinions of AURELIUS corporate and advisory contacts on the volume and drivers of divestment activity of European non-core assets in 2019, indicated that the number of Asian buyers of these assets will be lower in 2019, compared to last year. In contrast, North American buyers of such assets are expected to be higher. 

Dirk Markus, CEO of AURELIUS said: "It's clear from the results of our survey that corporate carve-outs have become a prominent part of the M&A landscape in Europe. This is a real endorsement of the way in which firms are embracing divestment as a form of corporate best practice and a natural part of the business lifecycle. By continually reviewing their existing portfolios and carving out units that are underperforming or that no longer fit into their overall strategy, corporates can optimize their businesses and free up capital for investment into core growth areas." 

Tristan Nagler, UK Managing Director of AURELIUS, commented: "Activist investors are more influential than they have ever been, as the level of capital being invested in and deployed by their strategies reaches an all-time high. Growing levels of business underperformance, prompted by a challenging macroeconomic backdrop, have acted as a trigger for activists, who are placing increasing pressure on management teams to deliver shareholder returns. In response, Boards are taking a more proactive approach to portfolio management, reviewing their strategy and business mix on an ongoing basis to identify and divest of non-core or underperforming assets. This enables them to strengthen their balance sheet and present a more compelling value story to investors.

"Unilever, Whitbread and Rolls-Royce are just three examples of corporates that have been driven to sell non-core business units as a result of activist pressure in the last year."

Markus added: "The findings of our survey indicate a shift in the location of buyers looking to acquire non-core European assets, which in itself is reflective of wider developments and attitudes across the global investment landscape. Escalating political and economic friction between Europe and China, for example, has resulted in a rising protectionist agenda against Asian investment over the past two years, which has greatly impacted Eastern deal making on the continent.

"In contrast, Europe is becoming an ever more attractive hunting ground for North American buyers, particularly as their own markets become increasingly competitive and expensive. Buoyed by economic prosperity at home, US and Canadian investors are continuing to seek out investment opportunities in Europe, where currency weaknesses in the euro and pound have contributed to the availability of high quality assets at bargain prices."  

 





This site, like many others, uses small files called cookies to customize your experience. Cookies appear to be blocked on this browser. Please consider allowing cookies so that you can enjoy more content across fundservices.net.

How do I enable cookies in my browser?

Internet Explorer
1. Click the Tools button (or press ALT and T on the keyboard), and then click Internet Options.
2. Click the Privacy tab
3. Move the slider away from 'Block all cookies' to a setting you're comfortable with.

Firefox
1. At the top of the Firefox window, click on the Tools menu and select Options...
2. Select the Privacy panel.
3. Set Firefox will: to Use custom settings for history.
4. Make sure Accept cookies from sites is selected.

Safari Browser
1. Click Safari icon in Menu Bar
2. Click Preferences (gear icon)
3. Click Security icon
4. Accept cookies: select Radio button "only from sites I visit"

Chrome
1. Click the menu icon to the right of the address bar (looks like 3 lines)
2. Click Settings
3. Click the "Show advanced settings" tab at the bottom
4. Click the "Content settings..." button in the Privacy section
5. At the top under Cookies make sure it is set to "Allow local data to be set (recommended)"

Opera
1. Click the red O button in the upper left hand corner
2. Select Settings -> Preferences
3. Select the Advanced Tab
4. Select Cookies in the list on the left side
5. Set it to "Accept cookies" or "Accept cookies only from the sites I visit"
6. Click OK

Corporate divestment activity of European assets is projected to increase for the fourth year running, according the findings of the AURELIUS Equity Opportunities annual corporate carve-out survey, with shareholder activism expected to contribute to the rise in activity. 

The survey, which canvassed the opinions of AURELIUS corporate and advisory contacts on the volume and drivers of divestment activity of European non-core assets in 2019, indicated that the number of Asian buyers of these assets will be lower in 2019, compared to last year. In contrast, North American buyers of such assets are expected to be higher. 

Dirk Markus, CEO of AURELIUS said: "It's clear from the results of our survey that corporate carve-outs have become a prominent part of the M&A landscape in Europe. This is a real endorsement of the way in which firms are embracing divestment as a form of corporate best practice and a natural part of the business lifecycle. By continually reviewing their existing portfolios and carving out units that are underperforming or that no longer fit into their overall strategy, corporates can optimize their businesses and free up capital for investment into core growth areas." 

Tristan Nagler, UK Managing Director of AURELIUS, commented: "Activist investors are more influential than they have ever been, as the level of capital being invested in and deployed by their strategies reaches an all-time high. Growing levels of business underperformance, prompted by a challenging macroeconomic backdrop, have acted as a trigger for activists, who are placing increasing pressure on management teams to deliver shareholder returns. In response, Boards are taking a more proactive approach to portfolio management, reviewing their strategy and business mix on an ongoing basis to identify and divest of non-core or underperforming assets. This enables them to strengthen their balance sheet and present a more compelling value story to investors.

"Unilever, Whitbread and Rolls-Royce are just three examples of corporates that have been driven to sell non-core business units as a result of activist pressure in the last year."

Markus added: "The findings of our survey indicate a shift in the location of buyers looking to acquire non-core European assets, which in itself is reflective of wider developments and attitudes across the global investment landscape. Escalating political and economic friction between Europe and China, for example, has resulted in a rising protectionist agenda against Asian investment over the past two years, which has greatly impacted Eastern deal making on the continent.

"In contrast, Europe is becoming an ever more attractive hunting ground for North American buyers, particularly as their own markets become increasingly competitive and expensive. Buoyed by economic prosperity at home, US and Canadian investors are continuing to seek out investment opportunities in Europe, where currency weaknesses in the euro and pound have contributed to the availability of high quality assets at bargain prices."  

 



Free subscription - selected news and optional newsletter
Premium subscription
  • All latest news
  • Latest special reports
  • Your choice of newsletter timing and topics
Full-access magazine subscription
  • 7-year archive of news
  • All past special reports
  • Newsletter with your choice of timing and topics
  • Access to more content across the site

More on:  Asset management