The proposed 3 billion euro sale of the pharmaceutical packaging company Gerresheimer is at risk of falling through. In March, several financial investors made indicative offers for the Düsseldorf-based company, including a consortium of private equity firms KKR and Warburg Pincus together with the sovereign wealth fund Abu Dhabi Investment Authority.

KKR has pulled out, according to reports first published by Bloomberg. KKR has declined to comment on the matter.

For KKR, the apparent collapse of the deal is another setback. The US private equity firms's share price has already fallen by 30 % since December. In Germany, KKR, under its European head Philipp Freise, is in the process of divesting from the media business of the Springer Group, after reputational risks increased. The Dutch bicycle manufacturer Accell, which was acquired during the pandemic and is highly indebted, is also facing growing difficulties, and has lost value due to quality issues.

After the initial euphoria in the private equity sector following Donald Trump's election, deals and exits increased in the short term due to lower interest rates and contained inflation. Now, disillusionment is spreading due to the threat of stagflation, which further complicates exits. IPO exits often fail. Bain and Cinven recently called off the IPO of Stada.

The flow of capital from fundraising is also starting to narrow. Since private equity firms have barely repaid any capital to their institutional investors during the exit drought, these investors have become more cautious in making new commitments. According to a Bain report, the value of payouts from the private equity industry to investors shrank to its lowest level in over ten years in 2024. Additionally, the rising private equity proportion in overall institutional portfolios – due to declining stock prices – limits new fundraising potential.

US protectionism is making matters even worse. Paul Condra, Global Head of Private Markets Research at the research firm PitchBook in Seattle, commented: „The tariff plans bring little relief to the private equity markets, which are already struggling under the pressure of low exit activity.“ The industry is now facing additional risk dimensions when it comes to assessing tariff risks across various portfolios, and the added uncertainty only exacerbates the ongoing hesitation in closing deals and deploying capital.

Apparently, the management of Gerresheimer and KKR could not agree on a fair price in this context. Gerresheimer's stock fell sharply last Friday, and is trading at around 55 euros versus 65 euros a week ago.

For the sale, Gerresheimer's management had engaged law firm Hengeler Mueller, and Morgan Stanley. The company does not have a dominant major shareholder. However, Gerresheimer is not ready to give up on the intended deal just yet: „We are still in talks“, said a spokeswoman for the manufacturer of special packaging for the pharmaceutical and cosmetics industries. She did not name any specific parties, saying "we will not comment without an official offer.“ She also declined to comment on the sharp drop in stock price on Friday, instead referring to the overall environment of falling stock prices in the wake of the US tariffs announcement. Gerresheimer itself is barely affected by the tariffs.

Nevertheless, it is notable that Gerresheimer's stock had been in decline since mid-March. By that time, the disappointing outlook for 2025 had already been priced in. When presenting its financial report, Gerresheimer had also warned that organic growth in the first quarter would be weak. The interim report will be published on 11 April. In response to recent developments, DZ Bank analyst Sven Kürten removed the stock from the „Equity Long Ideas“ list: „Fundamentally, the pullout makes an acquisition of Gerresheimer at an attractive price – one of the reasons we had added it to our top list – less likely", he said..