Wow, in England and France, significantly more companies are listed on business-for-sale platforms than in Germany. The reasons for this are apparently multifaceted.
The children can’t or won’t take over, and the owner is too old to continue running the business they’ve built their life’s work around. The company must inevitably be sold. But which path should the owner choose? Their own network isn’t as reliable as they originally thought. Prospective buyers? None to be found! Before the company loses value, it occurs to the senior owner that he could also place an ad on a business exchange. About six months later, the purchase agreement is signed—and the former owner knows his company is in good hands.
In fact, relatively few German business leaders list their companies on a business exchange—compared to their competitors in England and France. The German Business Exchange DUB.de examined and compared figures from Eurostat, the European statistical office, and Statista. According to the findings, 0.3 percent of German companies were listed on business exchange platforms in 2015. Surprisingly, in the United Kingdom the figure is 1.3 percent, and in France as high as 2.6 percent of companies.
Are German business owners unfamiliar with the internet, or what explains Germans’ apparently lower affinity for business-for-sale platforms? Or should the figures be interpreted differently? We reached out to auditors, M&A experts, and economic researchers. Volker Krug, an M&A specialist at the accounting firm Deloitte, knows from his many years of professional experience that the M&A business is less developed in Germany than in England and France.
“Anglo-Saxon-influenced countries like England have a very intense M&A culture compared to Germany; there, buying and selling companies is almost part of day-to-day business. Private equity firms are also even more widespread there, and that is precisely part of their business model,” says Krug. Furthermore, England is strongly influenced by the banking center in London, where the financial sector is the dominant factor in the economy. In Germany, by contrast, there are several economically strong regions. “In France, too, centralization around Paris creates a strong economic bastion.”
In general, experts have observed that German business owners want to find a successor for their company as discreetly as possible and rely on their personal networks to do so. The Institute for SME Research in Bonn, for example, draws attention to this.
Other experts also emphasize the structures of the economic systems. “Germany’s economy has proven to be more resilient in recent years than, for example, the French economy. That is why there are fewer changes among Germany’s business owners,” says Klaus-Heiner Röhl of the German Economic Institute. “In this country, more companies are still being passed down through generations than in the other two countries, as family-owned businesses have a strong tradition in Germany.”
However, family-owned businesses in Germany in particular often lack experience with M&A activities. “Germany has a higher proportion of small and medium-sized enterprises than England, but M&A as a strategic option has not yet fully caught on among these companies,” says Deloitte’s Krug.
