CAC 40: Therefore, CAC 40 trades a lot abroad to buy start-up companies

(BFM Bourse) – In a study dedicated to start-ups, BCG and RaiseLab set aside part of the purchase of start-ups from the groups of the famous Parisian index. Out of 345 acquisitions, 240 were thus made outside France.

The tenants of the CAC 40 remain extremely internationalized groups. To give an idea, Hexagon represents only 8% of the sales of LVMH, the most important company in the index in terms of capitalization. Even at Carrefour, which is one of the CAC 40 companies, if not the company most exposed to France, this exposure remains below 50%, as it stood at 46.2% in 2022.

This highly internationalized distribution of activity logically leads the large CAC 40 groups to look to foreign companies for acquisitions. Including for young shoots.

That’s according to a study on start-ups conducted by the Boston Consulting Group (BCG) and the company RaiseLab, published on Wednesday and shared by The echoes.

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Almost 70% of start-up purchases abroad

It should be noted that the term “start-up” is hardly defined in a categorical way, the study retained in its nomenclature companies “which have a strong potential for growth, use new technologies and have strong financing needs provided by fundraisers”. Specifically, the study focuses on companies that have been financed by venture capital over the past ten years.

On this basis, the number of start-up acquisitions by CAC 40 groups increased to 345 between 2013 and 2023, according to this study. And of this total, 240 operations were performed abroad and 105 in France. This corresponds to a ratio of 69% abroad to 31% in France.

“Our CAC 40 companies are of course companies with a scope of action that extends beyond French territory. It is therefore logical that these groups go ahead with acquisitions of start-up companies in all the countries that are relevant for them, which explains the relatively low proportion of France”, explains Lionel Aré, senior associate director of BCG.

Publicis, which has undergone a successful transformation in recent years to increase its digital offering, especially in data, is the CAC 40 group that has acquired the most start-ups with 31 acquisitions over ten years, including only three in France. Engie follows with 27 start-ups, including 11 in France, and Dassault Systèmes with 24 operations, including eight in France.

“It is clear that this share of France in start-up acquisitions of CAC 40 groups varies with their degree of globalization. -up important French”, emphasizes Lionel Aré.

Strategic interests

Some differences can be observed: Thales, Schneider Electric, Sanofi and L’Oréal have only acquired start-ups internationally, while all Bouygues and Safran’s acquisitions of start-ups have, on the contrary, taken place in France.

The young shoots have several virtues that are likely to interest our tricolor champions. They give them, for example, technological complementarities or new distribution channels, and are thus the core of companies that have a so-called “bolt-on” acquisition strategy, that is, centered on small operations, sizes.

“For CAC 40 groups, acquisitions of start-up companies follow two types of strategic rationale. These operations either strengthen the group’s core business, for example by bringing new technologies or distribution channels to companies in which the group already operates. Either to add, among other things, a. called ‘adjacent’ activities, i.e. new products or services, but very close to what is already offered by CAC 40 companies”, develops Lionel Are.

It should also be noted in this study that French start-ups are increasingly attracting foreign investors. Their share has been around 50% since 2021, compared to around a third previously.

Julien Marion – ©2023 BFM Bourse

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