(Bloomberg) -- This year’s unexpected demand for European stocks is helping to drive the region’s largest wave of block sales this century, with bankers anticipating more deals ahead.
From Pfizer Inc. finalizing its Haleon Plc exit to governments disposing of their crisis-era stakes in banks, investors have sold nearly $26 billion worth of European stocks through big-ticket trades in 2025, according to data compiled by Bloomberg.
Weighed down by weak economic growth prospects and looming fears of US tariffs, most strategists entered 2025 expecting European stocks to once again play second fiddle to their US peers. As it turned out, Europe’s benchmark is having its best start since 2019, sparking a flurry of accelerated bookbuild (ABB) offerings — quick sales of large blocks — as bulls take charge of the market.
“This has helped underpin the robust ABB volumes we’ve seen,” said Saadi Soudavar, head of equity capital markets in Europe, the Middle East and Africa at Deutsche Bank AG. “We do anticipate a fair amount of secondary activity still to come.”
The blitz builds on selldown volumes that were already strong in 2024, gaining fresh momentum as investors rotated into European stocks. Appetite for US equities — lifted at first by Donald Trump’s election victory — has cooled amid growing concerns over trade policies and a weakening economic outlook.
The opportunity has prompted shareholders in European companies to monetize often long-held positions, with Italy’s Agnelli clan and Switzerland’s Sandoz family selling a combined $6 billion of shares in Ferrari NV and Novartis AG respectively in February.
Private equity has also taken advantage of the conducive market to exit positions. A group of shareholders led by EQT AB sold a stake of about 1.34 billion Swiss francs ($1.5 billion) in Galderma Group AG earlier this month, even though some market turbulence prompted the backers to offer the shares at a wider discount.
In a more creative deal, Wendel agreed to sell a stake in Bureau Veritas through a three-year process.
“Long-term holders appear to be making the most of a Lazarus moment after a decade of dreadful European market returns,” said Mark Taylor, director of sales trading at Panmure Liberum.
The flurry of block sales also stands in contrast with quieter-than-expected new listings activity. For instance, drugmaker Stada Arzneimittel AG delayed its initial public offering until September due to recent market volatility, Bloomberg has reported.
For blocks — where would-be investors can buy into already-listed companies at a discount — volatility has had the opposite effect, acting as a wake-up call for sellers to cash in while the market is hot, said Ben Rolfe, an M&A equity sales specialist at Shore Capital. Further volatility could also close the window for blocks if stock prices drop too much, he said.
Sellers “have definitely been motivated to get stuff out the door given the uncertainty,” Rolfe said. The volatility “has certainly helped.”
Corporations and family offices are likely to remain the primary supply source of block offerings over private equity in the immediate future, according to Luca Erpici, co-head of EMEA ECM at Jefferies Financial Group Inc.
“Some corporates and families are still looking to monetize non-strategic cross-holdings to reallocate capital and diversify their portfolios,” he said.
Meanwhile, there’s optimism that the ongoing rebalancing by US and global investors toward European equities has room to run, boding well for further block transactions. The belief stems partly from the fact that the region’s stocks remain cheaply valued amid some governments’ plans to loosen their purse strings.
Nearly half the strategists polled this month in a Bloomberg survey have lifted their targets for the Stoxx 600 benchmark, taking the median up by over 6% from February to 566 points.
“With European equities back in vogue, it’s little wonder we are seeing a surge in activity,” said Emmanuel Valavanis, senior vice president of equity sales at Forte Securities.
--With assistance from Sagarika Jaisinghani and Bre Bradham.
