Centered around a high-profile public takeover attempt the Austrian market saw this summer, Wolf Theiss Partner Florian Kusznier shares his insights into the country's market landscape, the complexities of recent M&A activities, and the trends shaping Austria’s economic environment.
"August was an interesting month, particularly in the public M&A space," Kusznier begins. "The market saw a 'takeover battle' for Addiko Bank, where there were two competing public takeover bids. On one side, there was a Cypriot investor – Agri Europe – and on the other, NLB – a leading banking group from Slovenia with a strong presence in Central and Eastern Europe."
While Kusznier reports that NLB attempted to take full control over Addiko, he says that the situation was complicated by "a Serbian investor, AltaPay, who acquired a significant minority stake during the transaction, drawing considerable media attention. Despite NLB’s improved offer, the takeover failed to meet the minimum threshold set forth by NLB, largely due to the complex shareholder structure of the target company. It was a prominent example of how dynamic and competitive the Austrian public takeover landscape can be," Kusznier notes.
Aside from this occurrence, Kusznier reports that August was busier than usual from a transactional perspective. "We expect this momentum to continue into the fourth quarter. The pipeline is strong, and we're seeing a lot of inquiries; sellers and buyers are getting closer in terms of valuations and price expectations, which is a positive sign," he explains. "It also appears that financing conditions remain favorable, and this is contributing to a generally vibrant transaction environment."
Focusing on specific sectors that are particularly active right now, Kusznier puts technology and healthcare in the spotlight, "with several large transactions recently. There’s also notable activity in the energy sector, particularly around renewables, which continues to be a focus in Austria. Industrial M&A is holding strong as well," he says. "However, we're also observing an uptick in insolvency-related activities. This year, with the collapse of SIGNA group, Austria experienced one of the largest insolvencies in recent history, and this is still keeping a lot of affected parties busy." According to Kusznier, "smaller and not so financially strong consumer goods companies, especially those that benefited from government support during the COVID-19 pandemic, are now struggling as that support falls away and consumer spending shifts – the market dynamics are pushing some of these companies into tough positions."
Assessing the future of this trend going forward, Kusznier says that "insolvencies are certainly a concern, especially in consumer-facing sectors. Companies that thrived during the pandemic due to increased demand and government support are now finding it hard to maintain market share and revenues as conditions normalize." According to him, "this will likely lead to continued restructuring and insolvency activity, which is already involving numerous players from the legal and financial sides." Still, despite these challenges, "the transaction environment remains robust, and we are optimistic about the level of deal activity expected in the coming months," Kusznier concludes.
