Switzerland – Cautiously optimistic

Outbound activity

Switzerland also continued to see plenty of outbound M&A activity, with the largest outbound target nation (by volume) being Germany, followed by the US and Italy.

Outbound M&A saw approximately $47 billion worth of deals announced, with the largest outbound deal being Amcor PLC's merger with Berry Global Group Inc ($8.9 billion). Another notable deal was Swisscom Italia Srl's merger with Vodafone Italia SpA ($8 billion). The main Swiss industries targeted for outbound M&A were (by deal volume): industrials (24%); tech (16%); healthcare (13%) and materials (11%).

Last year, outbound dealmaking fell from its 2023 levels by 5% in volume, yet increased 58% in terms of deal value.

Sectors

Tech, consumer and healthcare were the most favoured sectors for M&A activity in Switzerland last year, while interest in the energy sector markedly increased. Tech saw the most activity, with Swiss targets receiving approximately $2.1 billion of investment in 2024. In particular, software-related M&A formed the backbone of Swiss technology-based dealmaking, accounting for 70% of tech deals in 2024. Private capital investors accounted for approximately two-thirds of Swiss tech transactions for H1 2024 – more than 10% higher than global levels for the same period.

Swiss healthcare-related M&A proved more resilient compared to the rest of the world. While 2024 did see a decline from previous years in terms of total deal value, this is largely attributable to 2024 seeing fewer 'megadeals', rather than a general decline in interest for Swiss healthcare companies. As with technology-linked M&A, private equity investors were a core driver for activity, with 2024 seeing the highest proportion of private capital linked acquisitions in the sector since 2020.

While only accounting for a modest portion of the aggregate M&A activity, investment activity in energy and power saw noticeable growth with 35% more deals being announced in 2024 compared with the previous year. Notably, this trend runs contrary to the general decline in Swiss M&A volumes of 2024. Switzerland has set ambitious goals to achieve carbon neutrality by 2050, which has particularly affected M&A activity in the renewables space. Such deals have focused on wind, solar and hydropower assets, in addition to their related technologies. Geographically, Switzerland is strategically placed to act as a key importer and exporter of electricity to the EU market. These ties also bring added complexity, in that Switzerland's political leadership must take care to ensure its future energy policies align with the EU to retain access to the European energy market. Therefore, any future EU regulatory change, or Swiss-EU divergence on energy policy could adversely affect cross-border M&A activity and Switzerland's attractiveness for energy investment.

Legal trends

With shifting political and macroeconomic policies and heightened costs of capital, investors proved cautious when approaching dealmaking. While Switzerland has remained politically stable and retained low interest rates (peaking at 1.75% in 2023), the nation has clearly been impacted by adverse global market trends. Additionally, increased caution and risk aversion has seen deals taking longer to close, partly due to more fulsome due diligence, and navigating the ever-evolving regulatory environment. 

As a safe-haven currency, the Swiss franc has strengthened over the past two years due to macro-political uncertainty. This may have been a double-edged sword, as large Swiss companies generate most of their revenue abroad and must then convert it back into Swiss francs. However, the ability to borrow in Swiss francs at low interest rates may provide Swiss companies with increased financial flexibility.

Recent amendments to Swiss Company Law have allowed organisations greater flexibility and boosted confidence for investors. Changes have included greater flexibility on payment of interim dividends and electing for foreign-denominated share capital, as well as greater protections for minority shareholders, including lowered voting thresholds. These changes have reportedly received a positive reception from companies of every size.

In addition to recently extended mutual recognition for UK-Swiss legal services, December 2023 saw Switzerland and the UK enter into the Berne Financial Services Agreement – a bilateral treaty for the mutual recognition of financial and insurance services. The agreement is to be implemented in 2025 and aims to enhance collaboration between the two financial centres, with common standards for cross-border financial services including: insurance, banking, asset management and capital markets.

Outlook for 2025

2024 proved to be a slower year for Swiss deal-making owing to economic and political uncertainty both in Europe and across the world. As this uncertainty begins to subside, Switzerland should expect to see greater M&A activity, particularly given the nation's strong currency, skilled workforce, and reputation for political and economic stability. Further access to debt has improved in recent months, and as such, while global events continue to evolve, our outlook for Swiss M&A in 2025 is cautiously optimistic.