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Global shareholder activism sees record number of European campaigns

TOTALENERGIES-FRANCE-INVESTIGATION:French prosecutor investigates greenwashing allegations against TotalEnergies
TOTALENERGIES-FRANCE-INVESTIGATION:French prosecutor investigates greenwashing allegations against TotalEnergies Copyright Thomson Reuters 2023
Copyright Thomson Reuters 2023
By Reuters
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By Amy-Jo Crowley

LONDON - Activist shareholders stepped up pressure on corporate boardrooms last year by starting 235 campaigns to shake up companies, including a record number in Europe.

The activist moves represented a 36% increase compared with a year earlier and the busiest year since 2018, based on a report by investment bank Lazard.

Activists buy up stakes in companies to lobby for change that they hope will improve a target’s share price. They tend to push for asset sales and management changes, with a growing focus on improving companies' environmental, social and governance (ESG) record.

Much of the activity was driven by the United States, where 135 new campaigns were launched - up 41% from a year earlier.

TotalEnergies, Unilever and Shell were also among 60 European companies targeted by activists, up 20% from the previous year and surpassing previous records in 2018, Lazard's 2022 Review of Shareholder Activism report showed.

Large-cap companies with a value $25 billion or more accounted for the biggest share of overall campaigns, while technology and industrial companies accounted for roughly four in ten campaigns. 

London-based Unilever's CEO Alan Jope is to retire this year following the arrival of activist Nelson Peltz on the board. Shell has also faced pressure from U.S. hedge fund Third Point to split the company.

British companies were popular for activists in 2022, representing more than a third of European targets, followed by France, while activity in Germany fell by about half. 

Lazard's report said that while the number of activist campaigns rose sharply last year, activist investors’ returns were hit by tumbling public market performance especially in the United States.

Market conditions in technology and retail resulted in more than half of targets in these sectors underperforming the market three months following the activist campaign announcement. 

Mergers and acquisitions-related campaigns, including "sell the company" demands, also made a come-back and represented 41% of all campaigns, despite global dealmaking suffering a fall last year.

The overall volume of M&A deals struck globally in 2022 reached $3.6 trillion, a 37% drop compared with 2021, according to Refinitiv data. 

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