German Companies at Risk: The Growing Wave of Activism in Europe

– Underperformance makes German companies targets for activists
– Another big wave of activism expected in Europe towards the end of the year -143 companies identified as potential targets

Alvarez & Marsal (A&M), a leading global consulting firm, presents an updated progress report on its A&M Activist Alert (AAA). The report has been published regularly since 2019 and contains precise analyzes and forecasts on the activities of activist investors in Europe. The updated edition shows the developments since December last year. A&M has identified 143 European companies that are at risk of being targeted by activist investors within the next 18 months.

Germany is even more in the focus of activist investors than it was six months ago. While the number of activists’ predicted targets remained the same in all the countries examined – a total of 143 – in Germany it has increased by four to 33 threatened companies. Responsible for this increase are the consumer goods and technology sectors, which are even more in focus.

“German consumer and technology companies are under particular pressure; especially due to weak returns and challenging investment decisions,” explains Patrick Siebert (Managing Director and Co-Head A&M Germany. “Activists call for competitive cost structures and yield-oriented investment decisions. The qualifications on the board and the supervisory board are viewed particularly critically. In other sectors, too, German companies are still at high risk of becoming the target of activists due to the economic difficulties.”

Most potential targets in Germany continue to come from the industrial sector, with a total of 11 companies. This represents 33% of all vulnerable companies in this sector across Europe. In particular, companies whose cost of capital exceeds their return on investment should expect to be the target of activist campaigns.

The momentum for activist campaigns is growing

In 2023, the number of activist campaigns in Europe has increased every month. The increased cost of capital in particular has become a problem for many companies and offers investors a starting point. In the December 2022 issue of the AA, A&M already predicted that Europe would be hit by a wave of activist campaigns in 2023. This forecast has been confirmed so far, which can be seen from examples such as Siemens AG, Brenntag SE or Fresenius SE & Co. There are now 102 funds in Europe pursuing activist strategies.

A&M’s analysis predicts that this trend will continue and that the true wave of the activist movement will hit Europe towards the end of the year. In particular, the focus is on the five key European markets of Germany, France, Great Britain, Switzerland and Scandinavia. The majority of targets will come from the industrial, technology and consumer goods sectors.

“Since 2020 we have experienced tremendous volatility in the market,” says Patrick Siebert. “This challenging environment for companies, coupled with the increasing (return) appetite of activist investors, suggests that the wave of activism in Europe will continue to increase towards the end of the year. The increased cost of capital will be a main driver of activist campaigns into 2024 stay in Europe.”

More ESG campaigns than ever before

The number of activist campaigns driven by the environmental ESG factor increased by 143% in 2023 compared to the same period in 2019. 17 campaigns were launched in Europe. This is partly due to an increasing number of ethically-driven investors adopting activist strategies to achieve their goals such as ShareAction, Follow This and As you Sow. In contrast, campaigns that focus on social ESG aspects have not increased in number to the same extent. They have been at a relatively constant level since 2021.

You can find the report under (

About Alvarez & Marsal

Corporations, investors and public institutions around the world turn to Alvarez & Marsal (A&M) for leadership, execution and measurable results. A&M is a leading global consulting firm focused on business consulting, business performance improvement, due diligence and turnaround management. When traditional approaches are no longer sufficient to bring about change, clients seek our deep expertise and ability to find practical solutions to their unique problems.

With over 7,500 associates on six continents, we deliver tangible results for corporations, boards of directors, creditors, private equity firms, law firms and government agencies facing complex challenges. We are experienced and world-class consultants, ex-regulators and industry representatives, working together to ensure our clients know what it really takes to turn change into strategic business value, manage risk and unlock value at every stage of growth.

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Original content by: Alvarez & Marsal, transmitted by news aktuell
Original message: https://www.presseportal.de/pm/118051/5551056