INSIDE CORPORATE, in its third edition, is a study of M&A activity in CEE/SEE, alongside macroeconomic and legal developments, published by Mergermarket in cooperation with WOLF THEISS, one of the leading European law firms in CEE/SEE. “In 2014, M&A activity in CEE/SEE has remained relatively stable. Based on the strong recovery of the US economy, the strength of the US dollar, the continuing financial stabilisation in Europe, and increased overall market confidence, 2015 has the potential to be a strong year for corporate acquisitions in CEE/ SEE,” said Horst Ebhardt, who heads the Corporate and M&A Group at Wolf Theiss. “In addition, traditionally ‘hot’ emerging markets are now eyed with increasing caution which makes CEE/SEE an even more desirable target region for foreign direct investment.” Drawing from extensive data on CEE/SEE M&A trends, the report offers insight into the economic, political and legal challenges and opportunities facing the region, as well as the outlook for 2015.
Elaine Green, Senior Deputy Editor, Mergermarket, added: “This year CEE/SEE is expected to see a great deal of M&A heat around export-bound consumer production and services, food retailing, industrials, IT, media and real estate. Sellers are likely to seek strategic and financial investors, whilst succession issues will continue to be a key driver. TMT will continue to rally interest, including a EUR 1bn worth 75% stake in Telekom Slovenije being fought over by Deutsche Telekom (DT), Cinven, Apax and Providence Equity Partners. Private equity is also looking at targets in those same key sectors. In the FIG space, Greece`s four systemic banks will begin to divest Balkan banks as part of a regulatory requirement from DG Comp. This could kick off later this year with Romania’s Banca Romaneasca, controlled by National Bank of Greece (NBG). The second quarter onwards is expected to see a higher level of M&A than last year, Mergermarket data trends and experts polled indicate.”
Other key findings from the report include:
- An improved global economic environment and cash-rich corporates, particularly from Asia and the US, supported inbound investment. Inbound M&A value increased 19% to EUR13.7bn YoY, despite a 12% drop in volume to 176 deals. This was the highest amount of foreign investment since 2010.
- Sector trends: The industrial and chemicals sectors saw the most deals in 2014 with 19% of total M&A. Meanwhile the real estate sector (22%) and the TMT and energy, mining and utilities sectors (21% each) made up the highest share of total M&A value.
- According to Mergermarket’s Heat Chart, which logs the number of “company for sale” stories announced over the past six months, the consumer and industrial and chemicals sectors will continue to be among the busiest in 2015, with 61 and 58 potential M&A targets, respectively.