Article by Claude Romy published in l’Agefi, 28 October 2019.
The players in the Swiss energy market are faced with the gradual liberalisation of the market, the challenges of the Confederation’s new energy policy and mergers & acquisitions that are helping to consolidate all the players in the market. A consolidating market:
- Faced with profound changes in their core market, most of the major energy distributors (such as BKW, Groupe E, Romande Energie, Axpo, etc.) are diversifying away from their core business and taking stakes in or acquiring companies capable of developing technical services in the energy sector.
- At the same time, French groups (Vinci Energies, Spie, Bouygues, Engie, Eiffage, etc.) are investing in the Swiss market. For the record, in 2018 Bouygues took over Alpiq Engineering Services for 850 million francs. After buying Yerly (Fribourg) in 2016, Eiffage took over Priora, a national player in the construction sector, also in 2018.
Energy flows in the construction, property and infrastructure markets:
- The fragmentation of the market, both at the level of small energy distributors and SME installers, and the changing needs of customers and technologies are already leading to and will lead to even more consolidation. Local players (electrical, heating and solar installers, etc.) are caught between energy distributors such as BKW, which is expanding all over the place (Switzerland and Germany) in services, and foreign players such as Bouygues and Vinci, which, through their total/general contracting approach, are capturing major infrastructure projects or the construction market, particularly large public buildings.
- On the customer side, large property owners and public authorities expect simple, effective and innovative solutions that address all their energy issues. So it’s no longer enough to be a supplier of electricity or gas; we need to be able to offer other services, sometimes even financing solutions. In line with the 2050 energy strategy, we need to be able to offer all the services that will enable more sober, more intelligent and more renewable management of the energy associated with buildings and infrastructure.
Small municipal or regional electricity distribution utilities, of which there are still several hundred in Switzerland, will be affected by these fund movements. Similarly, SMEs active in the various installation trades (heating, electricity, ventilation, sanitation) now face increased competition from energy distributors expanding into the energy services market.
Whatever the size of the company, the global challenges affecting the Swiss energy market should lead the players involved to rapidly rethink their strategy, innovate in terms of services and technologies, and form alliances to face up to these new strategic challenges and competition from larger companies.
Dimension SA has specialised in the sale, acquisition and valuation of companies since 1994. A recognised player in mergers and acquisitions in Switzerland, Dimension SA is the preferred partner of company directors and entrepreneurs for analysing the value potential of their companies and carrying out business transfer operations. The company, based in Lausanne, Geneva and Zurich, has been part of BCGE Group since 2015.