We’ve seen a number of large German acquisitions announced this year such as Siemens’ $7.6 billion purchase of Dresser-Rand and Merck of Germany’s $17 billion acquisition of Sigma-Aldrich.
Expect to see more of this trend from growth-starved, cash-rich German companies.
By acquiring Dresser-Rand, Siemens can expand in the US and strengthen their presence in oil and gas, a market where they see higher growth than in a lot of their other businesses.
In the case of Merck, Sigma-Aldrich provides more North American market share and reduces dependence on Europe.
In both transactions, the companies paid about a 37% premium over what the stocks were trading at, which is not uncommon when acquiring public companies.
Other large German acquisitions this year include the SAP-Concur Technologies deal for $8.3 billion that will boost SAP’s growth in cloud technology and the $11.7 billion consolidation of ZF Friedrichshafen and TRW Automotive Holdings that will create the second-largest automotive supplier.