European Activism: More Attacks, More Engagement, More ESG Coming in 2023

Skadden Publication / The Informed Board

Armand W. Grumberg George Knighton Simon Toms


  • The number of live activist campaigns in Europe grew again in 2022, and companies expect to see more in 2023, according to a survey conducted by Activistmonitor and Skadden.
  • Most companies surveyed have spotted weaknesses that could make them vulnerable to activists, and are addressing these.
  • ESG issues increasingly figure in European activist campaigns, often alongside other more traditional themes such as governance matters, potential M&A transactions, share buybacks and other approaches to improving shareholder returns.

For the third year, Skadden’s European M&A practice has worked with Activistmonitor to survey executives from leading European companies and activist investors to assess their expectations for shareholder activism in Europe over the next 12 months. In this article we summarize the key findings.

Major themes we expect to see in 2023 based on the survey include:

  • More campaigns: 86% of corporations identified new weaknesses that could be raised by activists. 
  • More engagement: 71% of the corporations responding anticipate an increase in shareholder activism and, of those, 48% expect a significant increase.
  • More ESG: 96% of respondents expect that activists will increasingly prioritize ESG issues in their demands. 

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The number of open live campaigns in Europe steadily increased, reaching 341 in December 2022, including 52 campaigns launched in 2022. The largest number of new campaigns were in the United Kingdom (25), Germany (eight) and Switzerland (four).
The number of demands remained at about the same level as 2020 and 2021.

Many corporations have been approached by activists more than once in the past year — 46% at least three times.Only 3% of the companies responding said that they had not been approached in the last year.

Board discussions of the threat of activist campaigns became more frequent in the past year, according to 63% of the responding corporations. 34% of responding companies said that their board had discussed the topic “far more than usual” and 29% replied “more than usual.”

Corporations with a market capitalization exceeding $2 billion were much more likely to be targeted.

Total campaigns by market capitalization (live and potential)

Total campaigns by market capitalization (live and potential)
Market cap 2021 2022 Growth
<US$1bn 16 17 6%
US$1bn-US$2bn 5 5 0%
>US$2bn 18 30 67%
Total 39 52 33%

The types of demands made by activists continue to be varied, with particularly sharp increases in demands regarding cost reductions and operational improvements and demands opposing acquisitions and mergers.

Demands made in open live campaigns

Demands made in open live campaigns
  2020 2022 Growth Y-o-Y 2022
Discussions 7 0 2 NA
Cost reductions/operational improvements 14 5 18 260%
Share buy-back/dividend/return of capital 9 8 4 -50%
Acquisition/merger 3 3 4 33%
Oppose acquisition/merger 8 6 23 283%
Bolt-on/divestiture/spin-off 13 14 9 -36%
Oppose bolt-on/divestiture/spin-off 1 4 0 -100%
Strategic alternatives 10 6 11 83%
Capital allocation/structure changes 10 4 0 -100%
Governance changes 15 15 13 -13%
Management/board changes 16 17 26 53%
Board member(s) appointment 22 18 15 -17%
Environmental/social changes 2 1 0 -100%
Total 130 101 125 24%

Corporations are concerned about new weaknesses being identified and serving as the basis for attacks by activists. 69% said they have identified potential vulnerabilities at their companies and discussed those with shareholders.

Increased activist activity is expected to lead to a greater number of unsolicited or hostile takeovers. 68% of responding companies expect more unsolicited or hostile deals in 2023, including 37% that expect a “significant increase.”

Attacks are expected to continue across Europe.Asked to rank the markets most likely to provide opportunities for activists in the next 12 months, 59% percent of the responding companies put the U.K. first or second, 54% put France first or second. Germany and Switzerland tied, with 27% of the respondents ranking them first or second.

… and across a wide range of industry sectors. Technology, media and telecoms was the sector where mostly likely to be targeted, according to companies responding. Energy, mining and utilities ranked second.

Given the level of attention, corporations expect to spend ever more time engaging with activists in the coming year.Three responses to activist pressure were rated most important: maintaining transparent disclosure practices, regularly evaluating a company’s governance framework and promoting broader shareholder engagement. Pre-emptively changing board composition was also cited.

Environment, social and governance issues are expected to figure prominently in activists’ demands in 2023.Pressure for M&A or other transactions and share buybacks or other returns of  capital are also expected to be a common subject of demands.

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