France was a Johnny-come-lately to the buyout boom. But now it is playing catch-up. What lies behind its sudden love affair with private equity?
The French private-equity business is on fire. Barely a month goes by without a e1 billion-plus deal. Conglomerate Bouygues has just sold Saur, its water-treatment business, to buyout firms for e1 billion. And luxury goods group Pinault Printemps Redoute recently sold its electronics distributor Rexel to buyout firms for €3.4 billion. PPR's chief executive, Serge Weinberg, has taken the hint – when he announced his resignation a few weeks ago he said he was launching his own private-equity fund.
Outstripping the Germans
Buyout firms spent €18 billion acquiring French companies last year, according to data provider Dealogic. This meant France nearly pipped Germany into second place among Europe's largest private-equity markets. Yet in 2003 the value of French deals was only €6 billion, barely a third of the total in Germany.
The French buyout business has had a boom year before. Lots of deals were done in 2002. However, electrical goods maker Schneider was forced to sell acquisition Legrand to financial buyers for competition reasons after Brussels controversially torpedoed the deal.