1. Introduction

This Austria Column analyzes industrial and automotive M&A in Austria – a sector that has recently experienced in-creased M&A momentum and a number of large-volume transaction announcements.

Steel group voestalpine is preparing to sell its German subsidiary Buderus Edelstahl. Recently, Buderus Edelstahl generated revenues of €350 million with around 1,100 em-ployees and shall be sold in line with a revised strategic focus on high-performance materials. Additionally, voestalpine plans to reorganize its German automotive com-ponents business due to the structural capacity underuti-lization in the German automotive supply industry. The company already sold a plant in Nagold for the same rea-son. Fiber manufacturer Lenzing is undergoing changes in its ownership structure. For instance, Brazilian pulp group Suzano is acquiring a 15% stake for €230 million and securing the option to acquire a further 15% by the end of 2028. This transaction takes place against the background of a strategy change at B&C Group, which previously held the majority stake in Lenzing and other Austrian industrial companies. B&C intends to attract strategic investors for its subsidiaries Lenzing, AMAG, and Semperit and to reduce its majority shareholdings towards blocking minority stakes (see our paper in the M&A-Review 6/2024). Rosenbauer, one of the world’s largest manufacturers of fire trucks, also reports changes to its shareholder structure: The investors Stefan Pierer, Mark Mateschitz, and Raiffeisenlandesbank Oberösterreich will gradually acquire a majority stake. Automotive supplier Innerio acquires the cooling module manufacturer Estra Europe with the aim of strengthening its market position in the field of cooling modules and heat exchangers for hybrid vehicles. With around 1,150 em-ployees, Estra Europe supplies European car manufacturers such as BMW and Stellantis with cooling modules for engines, drive trains, and air conditioning systems. The Bur-genland-based steel company Unger is establishing a joint venture with the US construction group Bechtel for its steelworks in the United Arab Emirates. Unger will retain a 51% stake in the joint venture and expects growth opportu-nities—particularly in the American market. Bechtel’s pri-mary motive for the deal is securing the supply of steel.

2. Industrial and automotive M&A at a glance

Transactions in the industrial and automotive sector play a consistently important role in the Austrian M&A market. Over the past ten years, they have accounted for 9% to 12% of total transaction activity.

A look across the borders shows that these numbers put Austria in line with Germany and Switzerland, where the industrial and automotive sector’s share of M&A activity has fluctuated between 9% and 13% in the last decade. In comparison, in the United States, the sector only accounts for 6% on average, and in Europe as well as on the global market for 7%. Thus, in Austria, industrial and automotive M&A is of disproportionately high importance. This is owed to the fact that in Austria, as in Germany and Switzer-land, the industrial goods sector (including mechanical en-gineering, metal processing, and automotive) continues to play a more significant role in relation to the overall economy than in many other countries where, for example, the service sectors account for a larger share. In particular, the traditionally high number of medium-sized companies in the region, combined with large automotive manufac-turers, contribute to Austria’s higher M&A activity in the industrial and automotive sector.

An analysis of the subsectors of industrial and automotive M&A reveals that most transactions take place in industrial machinery & equipment, accounting for around 43% of deals. The electrical equipment & components subsector takes second place, with around 24%. The automotive sector follows in third place, with around 18% of all transactions.

Fig. 1 • Industrial & Automotive M&A in Austria – Highlights

2.1 Top-Deals

The industrial and automotive sector has seen only a few deals in the billion-euro range to date. Two industrial and automotive deals made it into the top 10 largest transactions in our deal statistics dating back to 1991 (Lang et al., 2024)2.

At the top of the list is the 2019 takeover of German light-ing technology group Osram by Styrian sensor technology company ams. With a transaction value of €3.1 billion, this was the largest acquisition ever made by an Austrian com-pany. Second place is held by the 2018 acquisition of the gas engine manufacturer GE Jenbacher (today: Innio) by the US financial investor Advent. Advent had paid the seller General Electric a purchase price of €2.8 billion—which also included a plant in Waukesha (USA). Last year, Advent sold a significant minority stake to the Abu Dhabi Investment Authority. In a distant third place is the majority stake acquired by Korea’s LG Electronics in automotive lighting technology supplier ZKW in 2021, with a transac-tion value of around €1.1 billion.

2.2 Serial acquirers

Some of Austria’s most M&A-active companies operate in the industrial and automotive sector. Machinery and plant manufacturer Andritz has been responsible for 34 deals in the last decade. These transactions were driven primarily by the strategic goal of expanding the portfolio, which covers four business divisions, with the pulp and paper di-vision recording a particularly high activity level, at 16 ac-quisitions. This number includes the largest deal in the company’s history: In 2018, Andritz acquired the US com-pany Xerium, which manufactures components for the paper industry, for €712 million (comprised of the purchase price and assumed debt). Andritz has also been very active in other business areas such as metals, hydro, and environ-ment and energy, with 11 targets acquired in the last ten years. Another active player in the industrial and automo-tive sector, with 18 completed transactions, is Pierer Group, which operates primarily in the sectors of motorcycles and electromobility services. In addition to a current deal in-volving the fire truck producer Rosenbauer (see section 1), Pierer has recently made multiple significant acquisitions, including the full takeover of German wire manufacturer Leoni and the majority acquisition of the German company SHW, a manufacturer of pumps, engine components, and brake disks. Crane manufacturer Palfinger has been an-other very active M&A player in the last decade. The com-pany appears in the deal statistics eleven times, with a particular focus on internationalization-driven acquisitions, including the acquisition of a number of distribution part-ners, such as Spain’s Equipdraulic, Sweden’s Hinz Försäljnings, and Denmark’s Palfinger Danmark.

2.3 Origin of acquirers and target companies

ÖAustrian companies as acquirers: In around a quarter of all cases, Austrian companies target industrial and automotive companies from Austria, which corresponds roughly to the overall market (2023: 24%; see M&A-Review 1-2/2024). Conversely, this means that three out of four deals target a foreign country’s company, whereby—in line with the over-all market—German companies are by far the most frequent M&A targets. The other top three places are held by US companies in second and Italian companies in third place, al-though the latter two have not been on the “M&A podium” in the overall market recently (see M&A-Review 1-2/2024: 1) Germany, 2) Switzerland, 3) Spain)). A longer-term view shows that Europe (outside of Germany) has gained in im-portance as a target region in recent years, while domestic deals within Austria have declined.

Austrian companies as targets: When Austrian companies are acquired, three-quarters of buyers come from abroad. As in the market as a whole, German companies also play the largest role by far in the industrial and automotive sector, followed by players from the United States and Switzerland. Except for third place, which Sweden currently holds in the overall market, the M&A podium thus corresponds to the current overall market (see M&A-Review 1-2/2024: 1) Ger-many, 2) United States, 3) Sweden). A longer-term analysis shows that, in recent years, Europe (outside of Germany) and the United States have also gained in importance as countries of origin for acquirers, while deals within Austria have declined.

2.4 Strategic motives

An analysis of deal motives in the industrial and automotive sector shows that only financially-driven transactions (mostly Private Equity) occur with a high consistency over the long term. By contrast, most of the key strategic motiva-tions behind transactions are subject to considerable fluctu-ations depending on the market environment. In the aftermath of the financial and economic crisis with pro-longed restructuring activities and distressed M&A, acqui-sitions among close competitors, for example, played an above-average role, while expanding the product range was underrepresented as a deal motivation in light of the eco-nomic uncertainty. The picture changed significantly once the market recovered in the mid-2010s, when the industrial and automotive sectors began striving for diversification, broader product ranges, and market expansion. This is con-firmed by our new long-term study on the development of the Austrian M&A market, which identified the middle of the decade as the transition from post-crisis stabilization to a diversification phase. The ongoing transformation of many industrial and automotive sub-sectors (especially automotive) is another reason for the relative increase in deals for the purpose of diversification, product expansion, and, in some cases, the purchase of technologies and skills. The COVID-19 pandemic temporarily disrupted this new dynamic—in 2021, protecting the company’s own business model and acquiring capabilities (such as digitalization) ap-peared to be primary motivations. As the pandemic sub-sided, the range of transaction motivations broadened again, yielding a mix of diversification, broader product ranges, and capability expansion in line with the chal-lenging context factors (influenced by, e.g., ESG criteria and digital transformation).

Fig. 2 • Strategic Motivations of Austrian Acquirers in Industrial & Automotive M&A over time

2.5 Outlook

When assessing the future development of the industrial and automotive sector, it is important to differentiate between the short- and medium-term perspective. In the short term, there is solid evidence that the sector will close the M&A year 2024 with a good result. A mix of growth deals, knowledge-driven transactions, and strate-gic reorientations due to changing market dynamics, along with distressed M&A, give the sector a good dy-namic in a challenging environment. The current share of the overall market is 14%, which is above the long-term average. Some companies, such as B&C Group, have also announced further M&A activity in this area. In the medium term, the difficult context factors such as ca-pacity underutilization in the European automotive in-dustry, trade conflicts, and numerous other tensions at a geopolitical level are causing increased uncertainty. Other factors that will continue to affect the industry in the future are the increase in energy prices and the short-age of skilled workers, among others. However, given the stability of the M&A activity in the Austrian industrial and automotive sector in recent years, at least no signifi-cant longer-term slumps are to be expected—even if the motivations for deals may differ.

3. Deal ticker

This section provides a compact overview of the major transactions concluded in recent months (with Austrian participation on the acquirer, seller, and/or target side).

Financial services

• Generali increases its stake in BAWAG PSK Versicherung from 74.99% to 100%. The name “BAWAG Versicherung” will be retained and the cooperation with BAWAG as a sales partner continued.

Industrial Machinery & Equipment, other industrial goods

• Brazilian pulp group Suzano acquires 15% of the share capital of fiber manufacturer Lenzing for €230 million, com-bined with an option for a further 15% until the end of 2028. The seller is B&C Group, which has reduced its previous stake from 52.25% to 37.25% (see section 1 for details).

• Automotive supplier Innerio acquires cooling module manufacturer Estra Europe in a bid to strengthen its position in the field of cooling modules and heat exchangers for hybrid vehicles. The seller is the Chinese company Shanghai Aerospace Automobile Electromechanical (see section 1 for details).

• Exhaust system supplier Remus takes over the Italian GLM Group. GLM is a tier-two supplier in the automotive industry and shall enable Remus to strengthen its market position and expand its product portfolio.

• The Burgenland-based steel company Unger is en-tering into a joint venture with the US construction group Bechtel for its steelworks in the United Arab Emirates (see section 1 for details).

• Montana Aerospace, owned by Austrian industrialist Michael Tojner, sells its e-mobility subsidiary Alu Menziken Extrusion to the Chinese Mengtai Group. Montana’s deal motive is focusing the portfolio on aviation supply.

• Arms manufacturer Steyr Arms is acquired in full by the Czech investment group RSBC. After the transaction, Steyr will operate under a holding company with the Slovenian company AREX, a manufacturer of protective equipment and training ammunition.

Construction and real estate

• The construction group STRABAG acquires a 100%stake in Naporo Klima Dämmstoff GmbH. With this acqui-sition, STRABAG aims to expand its expertise in the field of sustainable building materials, especially hemp insulation materials.

• The City Tower Vienna, which houses the Justice Cen-ter for central Vienna, changes hands: Immofinanz sells the property for €150 million to Euro Real Estate, a company of the German Wilhelm von Finck Group.

• The foundation of the late Billa founder, Karl Wlaschek, acquires a Ringstrasse Palais in Vienna for €89 million. The property, which once housed the k.u.k. Fruit and Flour Ex-change, is sold by Real Invest Austria.

• The real estate developer UBM Development sells its 80% stake in Center Wien Mitte for around €30 million. The property houses office and retail space, as well as a mul-tiplex. The buyer is RALT Raiffeisen-Leasing.

Energy

• Energie AG Oberösterreich acquires a 29.4% stake in the Slovenian wind power and photovoltaic developer AAE Gamit. Energie AG Oberösterreich plans to develop wind power and PV parks with a capacity of more than 180 megawatts in Slovenia, accelerating both companies’ sus-tainability strategy.

Retail and food

• Signa finalizes the sale of the property of Berlin depart-ment store KaDeWe to Thailand’s Central Group (we al-ready reported on this in the M&A-Review 6/2024).

• The food group VIVATIS grows through its subsidiary GMS Gourmet, which acquires SV Österreich GmbH, a com-pany that operates 53 business catering and 21 care catering locations with around 450 employees.

Telecommunications, IT, and media

• The sensor and lighting group ams OSRAM sells – in the realm of a planned portfolio streamlining – a part of its passive optical components business. The buyer is the Chi-nese company Focuslight Technologies, which acquires the division for €45 million.

• Technology group AVL List increases its stake in the German start-up FIFTY2 Technology from 30% to 70%, in-tending to expand its involvement in the simulation and software sector.

• The start-up Parkside Interactive is acquired by the British Ascent Group. Parkside Interactive offers services in the areas of software development, user experience, and data/AI. Ascent Group, which operates in similar business areas, aims to grow through the acquisition.

Healthcare, chemicals, and pharmaceuticals

• Danish pharmaceutical group Novo Nordisk acquires around 60% of the Austrian medtech start-up Single Use Support, which offers filling and transportation solutions for pharmaceutical supply chains.

Other

• Bergbahn AG Kitzbühel receives a new minority share-holder. Specifically, the Luxembourg investor Alpin Un-limited, a subsidiary of LangRange Capital, acquires 31.85%of the company from the current owner, a Liechtenstein foundation.

4. Deal Pipeline

This section reports on deals that have been announced, planned, or initiated in recent months but have not yet been completed.

Financial services

• Raiffeisen Bank International refrains from considering the acquisition of a 27.8% stake in STRABAG (see M&A-Review 1-2/2024). The stake would have been acquired by the Russian industrialist Oleg Deripaska through the Raif-feisen subsidiary AO.

• BAWAG purchases the German retail banking busi-ness of the British Barclays Bank, comprising some 2.5 million customers and 700 employees. While Barclays plans to focus on the corporate and investment business in the future, BAWAG aims to grow in its core markets through the deal.

• Immofinanz is preparing a squeeze-out at its sub-sidiary S Immo, which will affect around 7.1% of S Immo shares, to be transferred to Immofinanz in return for a cash settlement. The corresponding resolution by the annual general meeting is expected in fall.

• The Austrian subsidiary of Zürcher Kantonalbank will be fully acquired by Liechtensteinische Landesbank (LLB). The deal is expected to be finalized in the first quarter of 2025 at the latest and shall enable LLB to expand its position in asset management.

• The planned acquisition of Addiko Bank by the Slovenian NLB (see M&A-Review 6/2024) has failed. NLB hoped to acquire a 75% stake in Addiko as part of a takeover bid but received offers for only around 36% of the shares.

Construction and real estate

• Signa is selling three development projects in Italy to Germany’s Schoeller Group: WaltherPark, which is cur-rently under construction, the Viva Virgolo project in Bolzano, and Hotel Bauer in Venice.

Industrial Machinery & Equipment, other industrial goods

• The steel group voestalpine is acquiring a majority stake in the Italian welding wire manufacturer Italfil. With this transaction, voestalpine aims to become a complete so-lutions provider in the field of welding technology.

• The firetruck producer Rosenbauer will get new ma-jority owners: The investors Stefan Pierer, Mark Mateschitz, and Raiffeisenlandesbank Oberösterreich are gradually ac-quiring the majority of shares, subject to regulatory ap-provals (see section 1 for details).

Retail and food

• In addition to the KaDeWe Berlin property (see deal ticker), Signa is also selling its shares in the business opera-tions of KaDeWe Group. The buyer is the Thai Central Group, which already held a 50.1% stake in the target and will acquire sole ownership through the deal. The deal in-cludes all three locations (Berlin, Hamburg, and Munich).

• According to media reports, the operator of Messe Wien, RX Global, is planning to withdraw from Vienna trade fairs.3 Discussions are currently underway regarding the extent to which the City of Vienna could take over the operation of the trade fair itself.

Telecommunications, IT, and media

• The Spanish company Cellnex Telecom is selling its Austrian business for €803 million to a consortium led by fi-nancial investors Vauban Infrastructure Partners, EDF In-vest (both France), and MEAG (Germany). The sale, which comprises, in particular, 4,600 telecom tower sites, is part of the consolidation strategy Cellnex is currently pursuing.

Healthcare

The healthcare group VAMED, previously majority-owned by the German company Fresenius (77%), is cur-rently undergoing extensive changes to its organizational and ownership structure:

• The previous minority shareholders ÖBAG (13%) and B&C (10%) are selling their shares to Fresenius. Fresenius plans to split up VAMED and sell significant parts of the group.

• Two thirds of VAMED’s rehabilitation business is to be sold to the French private equity fund PAI—a transaction that is currently the subject of political debate.

• The operational management of the AKH hospital in Vienna, the Austrian project development business, and thermal spa investments will be taken over in equal shares by PORR and STRABAG for a total of €90M each.

1 Lang/Lattacher/Herfurth (2024) M&A in Österreich: Vom Boom zur strategischen Differenzierung – ein Markt reift, in: Müller-Stewens/Schalast/Binder/Kunisch (Hrsg.) Mergers & Acquisitions, Schäffer-Poeschel Verlag, Stuttgart.

2 www.derstandard.at/story/3000000218731/betreiber-der-messe-wien-steht-vor-dem-rueckzug