30 julho 2024

European companies raise $14.5bn on the global markets in H1 2024

In the first half of 2024, 44 European companies have listed globally raising nearly $14.5bn.

Over the last two years, European companies raised on the global stock exchanges $16.3bn in 2022 and $14.5bn in 2023; with 2024 on track to return to pre-covid levels according to analysis by Linklaters*. $25.6bn was raised in 2019 whilst $25bn was raised in 2020, 2021 remains the standout year raising $98.5bn.

Linklaters has advised on the majority of the market’s highest profile listings in the first half of 2024, maintaining the firm’s dominant European market position. The firm’s Equity Capital Market’s practice completed 10 deals in the first half of 2024, including two of the largest IPOs in Europe, being CVC Capital Partners and Puig Group. In London, the firm has advised on every premium listing that has taken place in 2023 and 2024 so far**.

The practice has also been at the forefront of discussions with market regulators and industry participants across Europe, including a central role in the largest shake-up of the UK listing regime in 30 years.

Iñigo Berricano, Capital Markets Partner at Linklaters:

“This is a strong start to the year for European IPOs and indicates the direction the EU is trying to head in. To close the gap on the US. There is a focus on advancing the digital and sustainable economies, mobilising private capital to the securities market, and making necessary regulatory changes. There has been progress on this later point - the recent approval of the "Listing Act" by the European Parliament is expected to come into force at the end of 2024. It aims to relax certain disclosure requirements in prospectuses and introduces improvements in listing requirements - noticeably reducing the minimum free float needed- and clarifies the application of the market abuse regulation in aspects such as market soundings which are key in this type of transaction.

In Spain, the stock market has in the last few years lost ground in the overall European capital markets. Both BME and CNMV are focused on fostering measures and regulatory changes to increase the competitiveness of Spain’s capital markets. To address this, a working group including Linklaters is introducing measures to boost BME Growth listings. These include incentivizing investments, extending tax benefits for startups, and removing mandatory market transitions for high-cap startups. Suggested updates also aim to streamline CNMV’s prospectus review process. Additionally, Linklaters has led efforts to simplify primary offering settlements and listing procedures, enhancing the overall competitiveness of Spain’s capital markets.”

Over the last eighteen months, our analysis has revealed that Italy has been a popular jurisdiction for new listings, taking 29.5% of the listings (23.7% Euronext Growth Milan and 5.7% Milan), closely followed by the UK with 23% of all activity. Full breakdown of the last 18 months by volume below:

Updated graph 1

Ugo Orsini, Capital Markets Partner at Linklaters:

“The Italian economic and industrial environment is characterised by a significant number of SMEs (Small and Medium-sized Enterprises) that excel in their respective fields. These SMEs, historically supported by bank financing, have found, through listing on Euronext Growth Milan, an appropriate investor base to support their increasing shift towards digitalization and organic and external growth.

In parallel, Euronext Milan has remained the natural “stage” for companies in a more mature phase of their growth, with an international footprint and a leading market position, where being “Italian” constitutes a competitive advantage in their respective markets. This was confirmed by the most recent IPOs on the main market of Euronext Milan, comprising family owned and private equity backed companies constituting national champions and/or international excellences.

We are also seeing an increasing number of SMEs initially listed on Euronext Growth Milan who are planning their “uplisting” to Euronext Milan. This trend confirms the benefits for companies deriving from a listing – indeed, those companies are favourable to comply with the additional transparency and administrative requirements of Euronext Milan in return for the increased potential investor outreach derived from this market.

These recent results have certainly been supported by the streamlining of regulatory procedures, changes in corporate law, and some tax benefits linked to IPOs.”

When broken down by value, the picture looks slightly different:

Updated graph 2

The analysis has revealed that Italy’s value has been driven 100% by domestic companies, with similar situations in Germany and Spain, where the value here also comes from domestic issuances. In the UK 80% of the volume of activity is also driven by domestic companies.

Competition between stock exchanges to attract top-tier companies coming out of Europe has continued to intensify. 100% of activity in the Netherlands was driven by international companies, similarly, 20% of volume in UK also came from international companies. The analysis has also underlined that the US has taken 30.4% of the total value of European companies coming to market during this period, which has been heavily skewed by the $54bn listing of Arm.

Alexandra Beidas, Partner and Global Head of Employment & Incentives:

“We are already seeing a shift in UK listed company approaches to executive pay towards a hybrid between UK and North American practice.

Whilst UK companies are not trying to replicate US practice entirely they are moving some way towards it where appropriate for their business. Some remuneration committees have shown that they are prepared to push for what they consider right for the company to attract global talent which may go against standard UK practice and typical investor expectations here. Investors may indeed be prepared to support pay packages where companies fully justify such divergence and disclose sufficient information to clarify their decision-making process.

Examples of this are a number of companies who have gone beyond the dilution limits in the Investment Association’s Principles on remuneration. And we are also seeing it in relation to new hire awards: retention arrangements and on what happens in practice on a change of control.”

Tom Thorne, Partner in Linklaters Corporate practice:

“There continues to be fierce competition to attract and list global companies. The new UK listing rules which came into force on Monday (29 July) are expected to position the UK market more competitively on the international stage.

There is a high-quality pipeline of companies who we expect to come to market in the next couple of years across a range of different sectors including founder-led and PE-backed businesses.

In addition to the IPO pipeline, we are already seeing the earlier benefits of the listing rules changes with a number of companies who thrived on the junior market AIM stepping up to the main market and several large overseas listed companies interested in adding a secondary listing in London.”

Linklaters’ wealth of in-depth expertise in capital markets, cross-practice excellence and global footprint continuously positions the firm at the top of the market advising companies and investors on all elements of the IPO process. In the first half of 2024, Linklaters has advised on a number of leading IPOs, including: