According to a study released on Wednesday by professional services company Alvarez & Marsal, activist investors from the United States are projected to intensify their campaigns in Europe this year. The study highlights that the low market valuations of European companies present an opportunity for U.S. firms to acquire stakes more affordably and push for changes in management.
The report reveals that in the past year, 35% of public activist campaigns in Europe were initiated by U.S.-based funds, an increase from 27% in 2023, with a notable focus on countries like Britain, Switzerland, and Germany.
Notably, Jeffrey Ubben, a prominent activist investor from Wall Street, was appointed as a non-executive director at Bayer, following his persistent calls for the German chemicals company to undergo a breakup.
Malcolm McKenzie, Chair of European Corporate Transformation Services at A&M, emphasized, "U.S. activists continue to assert their influence in Europe, and this escalating interest shows no signs of waning. While the UK, Switzerland, and Benelux are already customary targets, Germany is poised to attract more attention."
The study also underscores that U.S. activists perceive an opportunity to boost performance in Europe, given that European stocks saw an average increase of 8% last year, significantly lower than the 29% gain observed by U.S. companies.
Switzerland has particularly experienced a surge in U.S.-led campaigns, accounting for 53% since 2020. A&M's analysis suggests that approximately 141 European companies could face public shareholder activism in the coming 18 months, without specifying individual targets.
The study identifies Britain as having the highest number of probable targets at 49 companies, followed by Germany with 33, and Switzerland next in line. A&M predicts that Switzerland, with 17 potential targets, is likely to witness a notable upsurge in shareholder activism.