Mergers and Acquisitions in Belgium

Belgium has long been a focal point for mergers and acquisitions (M&A) in Europe, with its strategic location, robust economy, and diverse industrial base attracting both domestic and international investors. The country’s M&A landscape is shaped by unique regulatory frameworks, historical precedents, and evolving market dynamics.

Regulatory Landscape: Belgium vs. Other Countries

In Belgium, M&A activities are primarily governed by the Belgian Competition Authority (BCA), which ensures that transactions do not impede competition within the market. This regulatory approach aligns with broader European Union (EU) competition laws, but Belgium has its distinct nuances.

A notable development is the introduction of the Foreign Direct Investment (FDI) screening mechanism, effective from July 1, 2023. This mechanism mandates that foreign investors acquiring significant stakes in Belgian companies, especially in sensitive sectors like energy, defense, and digital infrastructure, undergo a screening process to assess potential impacts on national security and public order. This move aligns Belgium with other EU countries that have implemented similar measures to protect strategic interests.

Frequency and Drivers of M&A Activities

Belgium experiences a steady flow of M&A transactions, driven by various factors:

• Market Consolidation: Companies often pursue M&As to consolidate their market positions, achieve economies of scale, and enhance competitiveness.
• Strategic Diversification: Firms seek to diversify their product lines or enter new markets through acquisitions, mitigating risks associated with their core operations.
• Technological Advancement: Acquiring companies with innovative technologies allows firms to stay ahead in rapidly evolving industries.
• Private Equity Investments: The presence of active private equity firms in Belgium fosters M&A activities as they acquire, restructure, and eventually sell companies for profit.

Historical M&A Activities and Notable Deals

Belgium’s M&A history is marked by several significant transactions that have reshaped its corporate landscape:

1. InBev’s Acquisition of Anheuser-Busch (2008): InBev, formed from the merger of Belgium’s Interbrew and Brazil’s AmBev, acquired U.S.-based Anheuser-Busch for approximately $52 billion, creating the world’s largest brewer, Anheuser-Busch InBev (AB InBev).
2. Fortis Group’s Acquisition of ABN AMRO Assets (2007): Fortis, in a consortium with Royal Bank of Scotland and Banco Santander, acquired parts of ABN AMRO for €24 billion. However, the financial crisis led to Fortis’s downfall, resulting in its subsequent dismantling and sale of assets.
3. GDF Suez’s Acquisition of Electrabel (2005): French utility company GDF Suez (now Engie) increased its stake in Belgian energy firm Electrabel to 96.7%, consolidating its position in the European energy market.
4. Fortis’s Acquisition of Générale de Banque (1998): Fortis acquired Générale de Banque for approximately €28 billion, strengthening its banking operations in Belgium.
5. AB InBev’s Acquisition of SABMiller (2016): AB InBev acquired SABMiller for over $100 billion, further solidifying its position as the world’s largest brewer.
6. Bain Capital’s Acquisition of House of HR (2022): Bain Capital acquired a majority stake in House of HR, a leading HR services firm, in a deal valued at approximately €3 billion, marking one of the largest private equity transactions in Belgium.
7. Orange Belgium’s Acquisition of VOO SA (2023): Orange Belgium acquired a 75% stake minus one share in telecom operator VOO SA, valuing the company at €1.8 billion, aiming to create a national convergent telecom operator.
8. CMB’s Acquisition of Euronav (2023): CMB acquired Euronav, a leading crude oil tanker company, in a strategic move to decarbonize maritime transport by applying hydrogen technology across a diversified fleet.
9. Cegeka’s Acquisition of CTG (2023): Belgian IT company Cegeka acquired U.S.-based Computer Task Group (CTG) to expand its global footprint and enhance its digital transformation services.
10. AB InBev’s Divestiture of Central and Eastern European Assets to Asahi (2016): As part of its acquisition of SABMiller, AB InBev sold several beer brands in Central and Eastern Europe to Asahi Group Holdings for $7.8 billion to comply with regulatory requirements.

Successes and Challenges

While many of these deals achieved strategic objectives, some faced challenges:

• Successes: AB InBev’s acquisitions have consistently expanded its global market share, solidifying its dominance in the brewing industry.
• Challenges: The Fortis acquisition of ABN AMRO assets coincided with the 2008 financial crisis, leading to significant financial strain, government intervention, and eventual dismantling of Fortis.

In 2024, Belgium’s mergers and acquisitions (M&A) landscape showcased resilience and strategic dynamism, with several notable transactions shaping the market.

Key M&A Activities in 2024

1. CMB’s Acquisition of Euronav (October 2024): Compagnie Maritime Belge (CMB) acquired Euronav, a leading crude oil tanker company. This strategic move aims to decarbonize maritime transport by applying hydrogen technology across a diversified fleet, positioning CMB at the forefront of sustainable shipping.
2. Axcent of Scandinavia and SKEL’s Acquisition of INNO (July 2024): Axcent of Scandinavia and SKEL fjárfestingafélag jointly acquired INNO, Belgium’s only department store chain. This cross-border transaction ensures the continuation of INNO’s legacy in the Belgian retail landscape while leveraging the expertise of experienced retail investors for future growth.
3. Smile Invest’s Exit from SmartSD (March 2024): Smile Invest sold its majority stake in SmartSD, a prominent online value-added distributor of physical security solutions, to Cobepa. Under Smile Invest’s ownership, SmartSD experienced significant growth, establishing itself as a leading player in security systems distribution across Belgium, the Netherlands, and France.
4. PanTera’s €93 Million Series A Funding (September 2024): PanTera, a Belgian radioisotope producer, completed a €93 million oversubscribed Series A fundraise. The funds will support the construction of a state-of-the-art Actinium-225 production facility in Belgium, crucial for a new class of targeted cancer treatments.
5. Gedeon Richter’s Acquisition of Estetra and Neuralis (June 2024): Gedeon Richter acquired Estetra SRL and Neuralis SA, subsidiaries of Mithra Pharmaceuticals, for €175 million. This transaction enhances Gedeon Richter’s women’s healthcare portfolio, adding innovative products in contraception and menopause treatment.
6. Shurgard’s Acquisition of Lok’nStore (August 2024): Shurgard, the largest developer and operator of self-storage facilities in Europe, acquired Lok’nStore, expanding its footprint in the UK. The acquisition adds 52 stores, doubling Shurgard’s UK presence and enhancing its growth strategy.
7. Vandemoortele Group’s Acquisition of Banneton Bakery (April 2024): Vandemoortele, a Belgian food group, acquired Banneton Bakery, a US-based company specializing in artisanal bakery products. This strategic move marks Vandemoortele’s first production platform in the US, reinforcing its commitment to serving customers in North America.
8. CA Indosuez’s Acquisition of Degroof Petercam (June 2024): CA Indosuez, the global wealth management brand of Crédit Agricole group, acquired Banque Degroof Petercam, a leading independent bank. The transaction, valued at €1.59 billion, aims to establish a pan-European leader in wealth management.
9. Warburg Pincus’s Exit from Aion Bank and Vodeno (July 2024): UniCredit acquired Belgium’s Aion Bank and its Polish technology partner Vodeno from Warburg Pincus for €370 million. This acquisition enhances UniCredit’s digital banking capabilities and marks its entry into the Belgian market.
10. Henchman’s Acquisition by LexisNexis (July 2024): Henchman, a Belgian legal technology company, was acquired by LexisNexis for a reported €150 million. The deal combines Henchman’s platform with LexisNexis’s AI technology to deliver new, personalized generative AI drafting solutions.

Strategic Decisions and Rationale

The strategic motivations behind these M&A activities include:

• Market Expansion: Companies aimed to enter new geographical markets or segments, as seen in Vandemoortele’s acquisition of Banneton Bakery to establish a production platform in the US.
• Technological Advancement: Investments in innovative technologies, such as CMB’s acquisition of Euronav to apply hydrogen technology in maritime transport, reflect a commitment to sustainability and staying ahead in evolving industries.
• Portfolio Diversification: Firms pursued diversification of their product or service offerings, exemplified by Gedeon Richter’s acquisition of Estetra and Neuralis to enhance its women’s healthcare portfolio.

Belgium’s M&A landscape in 2024 has been characterized by strategic acquisitions aimed at market expansion, technological advancement, and portfolio diversification. The regulatory environment continues to evolve to balance openness to investment with the protection of national interests, positioning Belgium as a dynamic player in the global M&A arena.