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Wolf Theiss/Mergermarket Corporate Monitor’s M&A Spotlight

M&A Spotlight: CEE

Cautious optimism, as 52% of dealmakers say their appetite for M&A in the CEE region will increase in the wake of the COVID-19 pandemic

Despite the pandemic, an economic downturn and restrictions on both the general public and dealmakers, deal value in 2020 in CEE/SEE increased year on year. And our exclusive survey reveals growing levels of optimism for the year ahead.

The latest edition of the Wolf Theiss/Mergermarket Corporate Monitor’s M&A Spotlight on CEE/SEE surveyed 150 senior-level executives regarding their dealmaking experience in the region and offers analysis and an outlook on M&A activity in the region.

Key findings include:

  • Investors cautiously optimistic on the post-pandemic outlook, with private equity (PE) firms especially bullish. Just over half (52%) of respondents said that the crisis will increase their appetite for deals in the next 12 months. However, a higher proportion of PE respondents (26%) said they were looking to pursue significantly more deals versus just 10% of corporates.
  • CEE/SEE defied the pandemic, with deal value actually rising in 2020. In 2020, the value of M&A in CEE/SEE rose 29% year on year to €28.5bn, compared to a 7% decline in global deal value in the same period. However, the volume of transactions in the region fell by 22% to 406 deals, performance more closely aligned with the global decline of 16% and Western Europe’s 18% year-on-year shortfall.
  • All eyes on the Czech Republic. The Czech Republic polled highest (45%) when respondents were asked which countries would provide the most new M&A opportunities in their preferred sector. Poland followed closely behind with 43%, and Romania placed a close third (37%).
  • TMT is the top sector. The TMT sector claimed €8.3bn of deals across the region, a 29% market share of total M&A. 33% of respondents also cited TMT as the top sector for M&A deals in CEE/SEE over the next two years.
  • ESG on the rise. Nearly two-thirds (63%) of respondents said that environmental, social and governance (ESG) scrutiny in deals will increase in the next three years, with 37% projecting it will increase significantly.