Week Ahead (11 March)

W/C Monday, 11 March – Coalition talks to begin in Portugal following the narrow election victory of centre-right alliance 

This week, the centre-right coalition in Portugal will seek to form a new government, following its narrow electoral win yesterday. With 99% of the vote counted, the Democratic Alliance (AD) has secured the most votes (29.5%), earning 79 seats in the 230-seat parliament.  The AD is led by the Social Democratic Party (PSD), the main opposition force. In its campaign, it promised to stimulate economic growth, improve public health services, and address concerns in the education sector, which has faced strikes over pay. 

Despite its support dropping more than 12% since the last elections were held in 2022, the ruling Socialist Party (PS), which has been in power since 2015, came a close second with 28.7% (77 seats). Notably, the far-right Chega (‘’Enough’’) surged in popularity, becoming the third largest party under the leadership of a former television sports commentator, Andre Ventura, with 18.1% of the votes (48 seats).  Ventura's populist anti-establishment message, often criticised for xenophobia, resonated with voters disillusioned with corruption, rising housing costs, low wages, and struggling public services which dominated the agenda in previous weeks.  

Portuguese President Marcelo Rebelo de Sousa is now expected to invite the AD leader Luis Montenegro to form a government, following consultations with party leaders. Despite its narrow victory, the AD has no clear pathway to form a government on its own. The PS announced its intention to lead the opposition rather than supporting the government in parliament. Ventura expressed a desire for a coalition with AD, warning of political instability if denied. However, Montenegro reiterated this morning his election promise not to rely on the far-right to govern. Nevertheless, even with the support of the centrist and pro-business Liberal Initiative, which won 8 seats, the centre-right coalition falls short of the majority needed to pass legislation. In the face of political instability, Montenegro could find himself under internal pressure from his party to reconsider this stance, with Chega potentially emerging as a kingmaker.  

Chega is affiliated with the eurosceptic far-right Identity and Democracy (ID) group in the European Parliament. Its emergence as the third biggest party in the country reflects a broader trend across the EU, with the ID group currently projected to overtake the centrist forces as the European Parliament’s third largest political group in the European elections of June. Ventura has received the support of other prominent far-right figures in Europe, including Italian Deputy Prime Minister Matteo Salvini and Geert Wilders, who is currently in talks to form a government in the Netherlands. 

W/C Monday, 11 March – European Commission likely to announce decision on the $4.4 billion takeover of Alteryx by Clearlake Capital and Insight Partners 

This week, the European Commission is likely to announce its decision on whether to allow the $4.4 billion acquisition of Alteryx, by a consortium led by the private equity firms Clearlake Capital and Insight Partners.  The US-based Alteryx, is an analytics cloud company.  The deal, announced in December 2023, came amidst stiff competition from major rivals like Microsoft and Oracle, along with challenges in securing new business, which have impacted Alteryx's valuation, attracting acquisition interest. 

Established in 2017, Alteryx serves over 8,300 companies, including prominent names like Coca-Cola, Vodafone, Walmart, and Ford Motor Company. Its platform facilitates rapid data analysis and processing. In recent years, Alteryx has shifted towards a subscription-based business model to cater to the increasing demand for data analytics services.  

W/C Monday, 11 March – European Commission likely to announce decision on KKR’s purchase of 50% stake in healthcare tech firm Cotiviti 

This week, the European Commission is also likely to rule on KKR’s purchase of a 50% stake in the US-based healthcare tech firm Cotiviti. Last month, it was announced that KKR had reached an agreement to acquire a stake in Cotiviti from investment manager Veritas Capital.  Subsequently, the involved parties filed a notice of the proposed deal to the Commission on 28 February. Although the financial terms of the transaction were not disclosed, the deal is expected to reinforce KKR's portfolio of healthcare analytics investments. Amid tightened lending standards by banks due to higher interest rates, private credit firms have become a favoured source of capital for buyout firms. 

Cotiviti was privatised by Veritas Capital in 2018. The company specialises in providing payment accuracy and analytics services to health insurers and other entities within the healthcare industry. KKR's healthcare portfolio includes investments in various healthcare analytics firms, such as Clarify Health Solutions, Headlands Research, and Resolian Bioanalytics. Upon the completion of the deal, KKR and Veritas will hold equal ownership stakes in Cotiviti, with the transaction anticipated to close in Q2 2024. 

W/C Monday, 11 March – European Commission likely to rule on Fassi Group’s acquisition by Investindustrial 

Another acquisition deal likely to receive the Commission’s green light later this week is the purchase of a majority stake in the Italian engineering company Fassi Group by Investindustrial, one of the largest private equity funds in Europe.  

The Bergamo-HQed Fassi Group is a leading manufacturer of lifting, forestry, and recycling technologies worldwide. In 2023, the Fassi Group reported revenues of €470 million, with the majority of sales generated outside Italy.  The agreement was announced in late January, with the involved parties filing a notice of the proposed deal to the European Commission, pursuing a simplified procedure, on 23 February. Following the acquisition, the Fassi family will retain a 30% stake in the company, with Giovanni Fassi continuing in his role as CEO. Financial terms of the transaction have not been disclosed.  

DG COMP may clear the deal after the completion of the preliminary review or initiate a four-month investigation if serious concerns about competition distortion arise. 

Thursday, 14 March – General Court hearing on Ryanair’s challenge to state aid granted to LOT  

On Thursday, the General Court, the EU’s second highest court, is set to hear Ryanair’s legal challenge against the European Commission regarding state aid  provided to a rival airline during the COVID-19 pandemic. 

More specifically, the case (T-398/21) concerns the Commission’s decision to approve €650 million of state aid for Polish airline LOT in December 2020. In its lawsuit, Ryanair argued that the Commission misapplied the Temporary Framework for State aid measures to support the economy during the pandemic by failing to demonstrate LOT’s eligibility for the recapitalisation aid, and for conducting a ‘’flawed review’’ of the proportionality of the recapitalisation amount, aid’s remuneration, and conditions for the State’s exit.  

In total, Ryanair has filed 16 lawsuits against the Commission for allowing state aid to airlines across Europe, including Lufthansa, Austrian Airlines and TAP. Most recently, in February, Ryanair won its second challenge against a €3.4 billion Dutch state aid scheme in support of Air France-KLM's Dutch unit, after the General Court ruled that the Commission had not taken into account all beneficiaries within the airline group, annulling the approval of the state aid. 

Separately, Ryanair’s Dublin headquarters was raided by Italian and Irish competition officials on Friday following a complaint from Italian online travel agents.  Ryanair released a statement saying that in February the Court of Appeal in Milan had already dismissed claims against it.  The investigation by the Italian Competition Authority was launched in September 2023.