Latest deal structuring and financing trends highlighted at Mergermarket Germany Forum 2017


Noerr was once again the overall legal partner for the annual Mergermarket Germany
Forum, held in Düsseldorf on 29-30 March 2017. More than 250 CEOs, CFOs and M&A heads attended to network with other private equity, investment banking, corporate finance and law firm professionals to discuss the latest cross-border M&A trends, practical ideas for deal execution, and increase their understanding of non-bank financing options.

Keynote addresses were given by Jörg Asmussen of Lazard on the future of the German and European banking industry and by Thomas Mayer, former Chief Economist of Deutsche Bank, who spoke on the future of the economy in an era of global protectionism.

Thomas Schulz, head of Noerr’s London office, chaired the two-day event, which discussed several current issues including:

Debt Funds

  • Currently attractive due to their flexibility, speed and ‘single point of contact’ concept. However, additional equity might be required to bring down pricing compared with what banks can offer.
  • Generally, a partnership approach is preferred with banks, where they can cross sell products such as FOREX and cash management, which hold no interest for funds. We are also likely to see an increase in covenant light documentation.
  • There may be more corporate opportunities for debt funds in the future, so far the majority of the product is for financial sponsors. There are likely to be more first out/super senior revolving credit facilities.

Private Equity

  • While there is a lot of investment capital and debt available currently, this does not necessarily mean more leverage. There is room for the expansion of growth strategies such as buy and build.
  • Leverage on the fund itself is seen as critical as investors are not easily fooled. Asset prices are high. Need to price in everything. Management is essential.
  • Since large companies are more robust, it is attractive to follow megatrends for investment theses. Funds should think in terms of five-year plans which allow sufficient time to implement desired strategies.

High Yield

  • High yield will also continue to see more covenant light documentation.
  • Leveraged loan pricing could be as low as 300 basis points.

2017 Deal Drivers

  • Increased digitalisation.
  • A further rise in shareholder activism as a catalyst for M&A activity, as in cases such as the Dutch AkzoNobel, whose management rejected several unsolicited takeover bids in excess of €26bn from PPG Industries. The company then found itself facing repeated calls – and a legal challenge - from active investor Elliot Advisors for the removal of AzkoNobel’s chairman, which has forced the company to explore alternative strategies.
  • More activity in the automotive, healthcare, technology and chemicals sectors.

Selected presentations and videos from the conference can be viewed at