Royal Dutch Shell Plc announced the biggest-ever purchase by a Dutch company yesterday, capping the most valuable week in national merger activity since 2007. It’s a somewhat rare case of a Netherlands-based firm being the hunter rather than the hunted.
Ten benchmark Dutch stocks, or just under half the 25 spots that make up the Amsterdam Exchanges Index, have been acquired since 2007, when ABN Amro Holding NV was snapped up for $100 billion by a consortium led by Royal Bank of Scotland Plc. The latest to go is TNT Express NV, which this week agreed to be bought by U.S. rival FedEx Corp. for $4.8 billion.
“The interest rate is extremely low, the financial position of a lot of companies is good, and for the Americans the dollar is strong so they can shop relatively cheaply in Europe,” Joost van Beek, an analyst at Theodoor Gilissen Bankiers NV, said by phone. “I think we will see a lot more deals.”
Even the $70 billion acquisition of BG Group Plc by Shell, itself an Anglo-Dutch entity, brought more resignation than relief to commentators, inspiring Dutch newspaper De Volkskrant to run a headline today that claimed “Only Shell isn’t prey,” before going on to say that nearly every other listed stock is.
Other major companies that have been the subject of takeover speculation in the past year include Heineken NV, which rejected an approach by larger rival SABMiller Plc, and Royal DSM NV, which may attract interest from German chemicals maker Evonik Industries AG. A planned split of Royal Philips NV later this year has some speculating that it too could become a target.
Since mid-2007, companies including Royal Numico NV, Hagemeyer NV and real-estate company Corio NV have all been acquired by foreign buyers.
“This is becoming an issue in big, more mature sectors,” Marc Hesselink, analyst at ABN Amro Bank NV, said by phone. Industries likely to attract increased M&A interest across Europe include telecommunications, media and oil services, he added.
Away from traditional M&A, the Netherlands is attracting a steady flow of corporate activity. Initial public offerings in Amsterdam in 2014 raised about $8 billion, making the exchange the busiest in continental Europe for such sales in the period. Optimism about more sales this year was damped though when Dutch Finance Minister Jeroen Dijsselbloem last month delayed plans to sell shares in ABN Amro, which the state rescued in the throes of the financial crisis.
Still, there could be more takeovers by Dutch companies in the future, even if some are only linked to the country by their tax payments. Mylan NV, which has operational headquarters in Pennsylvania but is based in the Netherlands after last year buying Abbott Laboratories’ generic drug business, on Wednesday offered to buy Perrigo Co. for $28.9 billion.