International law firm CMS and DealWatch today publish their “Emerging Europe: M&A Report 2013/14”. The report highlights that M&A activity in Emerging Europe in 2013 essentially remained flat in terms of deal volume and showed a moderate decline in deal value, falling from €138 billion in 2012 to €112 billion in 2013.
The year ahead, however, is expected to experience a steady increase in deal flow.
Last year the number of announced deals with a value above €1 million dropped by 2% to a total of 2,555
transactions. The most active sector by deal number in 2013 was services, with 484 deals representing 19% of all transactions.
Mining (including oil & gas) was the leading sector in terms of deal value, with over €23 billion accounting for just over 20% of the overall market.
The largest transaction in the region was announced in the final days of the year – a 30% stake in Russian construction firm Stroygazconsulting reportedly changed hands for over €3.5 billion.
M&A in Russia accounted for 31% of all deals in Emerging Europe and 62% of the total deal value in 2013. Poland came second with a 14% share in deal number, followed by Turkey with 13%. Financial M&A made up over 10% of all deals in 2013 but the number of bank transactions in the region is likely to grow in the coming years as Western European lenders keep pulling back to boost their capital positions at home, and Greek banks are forced to shed assets.
Helen Rodwell, CEE Corporate Partner states:
‘We expect 2014 deal-flow in CEE to be driven by increased appetite from foreign acquirers, followed by the availability of under-valued targets and private equity buyouts. On the sell-side, the biggest deal catalysts will be non-core asset sales, distressed M&A and exits by private equity funds reaching the end of their lifecycle’.
Graham Conlon, Partner, Head of Corporate and M&A in CMS Ukraine and Global Co-Head of International Private Equity adds:
‘In 2013 Ukraine saw some very significant examples of foreign direct investment (FDI) in Ukraine, such as Shell’s US $10 billion investment in shale gas, but this was typically in the oil and gas space, and not in the form of M&A transactions. FDI in the M&A sector was muted and we witnessed a number of high profile exits from the country – in particular in the banking sector. The outlook in Ukraine for 2014 is currently unclear, especially in light of the current political climate, but currently we see it much the same as in 2013 – comparatively little FDI, but with a number of high profile M&A deals being carried out by and amongst Ukraine’s elite, backed by a few more high profile strategic exits’.
Boris Maleshkov, Head of Editorial, Emerging Markets Information Service (EMIS) adds:
‘While deleveraging by Western European banks will continue to be a concern for the stability of Eastern Europe’s economies, the entry of private equity giant KKR in the region is an encouraging sign of investor confidence. Barring a new flare-up in the Eurozone debt crisis, we believe that banking sector consolidation and the nascent economic recovery in Emerging Europe will generate more M&A activity in 2014.’
To acquire the full version of the “Emerging Europe: M&A Report 2013/14,” please contact Liliya Omelyanenko ([email protected])
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CMS
Founded in 1999, CMS is a full-service top 10 global law firm, based on the number of lawyers (Am Law 2012 Global 100). With 56 offices in 31 countries across the world, employing 2,800 lawyers, CMS has longstanding expertise both at advising in its local jurisdictions and across borders. CMS acts for a large number of Fortune 500 companies and the FT European 500 and for the majority of the DAX 30. Revenues totalled €841 million in 2012.
For more information, please visit www.cmslegal.com.
EMISPRO DealWatch
Emerging Markets information Service (EMIS) delivers deep, rich company and industry information, alongside the relevant proprietary and multi-source news, research, analytics and benchmarking tools that allow professionals to make profitable decisions faster. EMISPRO version additionally includes sophisticated analytical tools such as DealWatch, the leading Emerging Markets M&A information solution.
The EMISPRO DealWatch service combines proprietary M&A and ECM news created by the expert DealWatch financial journalist team, over 75,000 M&A and ECM deals, research, company valuations and deal forecasts with sophisticated screening, analytics and public information to help users quickly and easily create targeted pipelines to complete more deals in less time.
This solution is designed to help investors and business owners quickly identify future M&A deal and Equity Capital Market (ECM) activities, trends and opportunities in emerging markets.
For more information, please visit http://www.emis.com/emispro
