Dutch investors care for the German Mittelstand | KPMG | DE

Germany is back on the agenda of Dutch mid-market companies

Dutch investors care for the German Mittelstand

... and how the German companies can profit from that renewed interest.


Partner, Audit, Netherlands Country Practice Head

KPMG AG Wirtschaftsprüfungsgesellschaft


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After a number of years during which expanding in the BRIC countries was popular for Dutch companies, Germany is getting back on the agenda again. The German economy is the strongest within Europe and growth rates remain stable. Also the Dutch economy continues to recover and a number of companies are increasingly seeking for opportunities to expand outside the Netherlands.

The interest for Germany does not come as a surprise. The Netherlands still hold the largest amount of direct investments in Germany and Germany is by far the most important trade partner. Furthermore, the Brexit underlines the growing importance of its Eastern neighbour.

However, what surprises is the fact that in particular mid-market and family-owned companies are looking for German acquisition candidates. The acquired companies are often profitable niche players in the high tech sector with a good reputation in their market and a solid customer base. The vast majority of these family-owned businesses either lack financial recourses to make a firm step to become global or have imminent generation succession issues to solve. But how can Dutch investors compete against private equity, Chinese or US investors, who also have discovered the attractiveness of the German hidden champions?

The answer to that question is twofold. First, Dutch investors are often aiming at strategic alliances and have a long term vision. Second, the entrepreneurial culture of Dutch and Germans is quite similar. The German family business owners want to see their companies and their employees in the right hands. Often, the former entrepreneur and employees meet in the same pub or are member of the same sports club.

Albeit those similarities, substantial differences between Dutch and the German entrepreneurship exist. Differences exist in leadership and communication styles, the perceived importance of reliable monthly financials or the importance of the internal control framework, to name a few. In addition, to find the right mixture of freedom and control is not easy and requires a sound understanding of the German mid-market corporate culture. To make an investment in Germany a success, there is no difference to investments in BRIC countries: be prepared and never underestimate the cultural differences.

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