American investors are increasingly interested in acquiring German family-owned and small to medium-sized enterprises. Companies like Birkenstock, Wismann, Linde, and ebm-papst have all fallen into American hands. According to analyses, last year American investors participated in 76 purchases and investments in German industrial and manufacturing companies, with the value of these transactions reaching approximately $29.5 billion.
Attractive Factors of German Companies
Samahmed Al-Kabert-Mahmood from Veracity Capital Investments points out that American investors' interest in German companies remains high. He says: "German industrial and manufacturing companies are very attractive due to their high expertise, strong customer relationships, and good technical knowledge." Many of these companies have established strong positions in their specific fields over several decades.
At the same time, many owners of German companies have reached an age where they are considering selling their businesses. Al-Kabert-Mahmood emphasizes that "often there is no succession for these businesses within families." This has led to companies entering the sales market that were not available a few years ago.
Notable Recent Transactions
Among the most significant purchases this year is the acquisition of ebm-papst, a manufacturer of electric motors and fans, which was bought by Madison Air for $5.4 billion in August. Additionally, the company Everllence, previously known as MAN Energy Solutions, was sold to Bain Capital in June, with the American firm acquiring 51% of its shares.
According to data from the German Economic Information Network, the United States holds the largest number of German companies. Out of a total of 7,861 companies identified in the "German Companies Under Foreign Ownership" database, 1,750 belong to American investors.
A report by PricewaterhouseCoopers (PwC) also highlights the increasing interest of American investors in acquiring German companies. The report mentions the purchase of BASF Coatings by Carlyle along with the Qatar Investment Fund for approximately €7.7 billion.
A recent survey by the American Chamber of Commerce in Germany shows that about 62% of American companies operating in Germany expect business conditions to improve in the next three to four years. Additionally, 52% of them are planning to expand their operations in Germany, which has increased compared to 2024.
However, the increase in American purchases and investments does not seem to align with the decrease in U.S. investment flows to Germany last year. According to Bundesbank data, investment from the United States has decreased to €11.8 billion, which is nearly 44% less than in 2024. In contrast, investment from the UK has increased to about €26 billion.
Al-Kabert-Mahmood says: "I think this trend will continue, although it may not simply be an increase in the number of transactions each year." He also notes that the relatively low valuations of German companies, especially in the SME sector, could make acquisitions attractive for international buyers.
