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M&A market in Central-Eastern Europe boasts its highest value since 2013 as well as attractive assets for 2017
CMS Cameron McKenna,
Kyiv, Ukraine, Wed, Feb 1, 2017
UK and Asian investors increasingly active in the CEE region
According to the “Emerging Europe M&A report 2016/2017” published by CMS in cooperation with EMIS, M&A deals in Central-Eastern Europe peaked in value in 2016 at €86.7bn. This represents a 62% increase compared to 2015, and the highest result since 2013. With 1,985 transactions, the CEE region experienced a 7% decline in the volume of announced deals, but their median value increased by €2mln to €11.2mln.
Helen Rodwell, Partner, CEE Corporate Practice, CMS: Dealmakers acted cautiously as global economic growth remained weak, amid uncertainty about election and referendum results. Confidence picked up towards the end of 2016, setting the scene for robust M&A activity in 2017. There are many reasons to be positive about this year, including the potential pipeline of deals that already await completion.
According to CMS, a law firm that has worked on more deals in CEE countries in last five years than any other law firm*, the varied performance of individual countries in 2016 reflected the fragmented nature of the region. Russia and Poland retained their first and second positions respectively in deal activity, despite drops in transaction numbers. The rising stars of the region were the Czech Republic and Romania.
Radivoje Petrikic, Partner, CEE Corporate Practice, CMS: The outstanding feature of 2016 in CEE was also the rapidly growing influence of Asian investment, most notably from China. The strong Chinese interest in the region is a relatively recent development, laying the foundations for a wave of investment into the future.
In 2016 the UK and China doubled their spending in CEE to €5.2bn and €4.4bn respectively to become the second- and third-largest foreign investors by value in the region. The value of US spending in the region dropped by two-thirds; however the US remained the largest foreign investor in CEE by deal volume (88), followed by the UK (75), Germany (66), France (46) and Austria (37).
Across the region, the most active sectors were real estate and construction, with 357 deals worth €17.8bn (89% increase in deal value) followed by manufacturing, telecoms and IT.
Stefan Stoyanov, Global Head of M&A Database, EMIS: In 2017 we expect to see more deals in the banking sector. Low profits, the ongoing restructuring of Greek lenders, the billions in fees imposed on financial institutions, new sector regulations, and the Italian banking crisis are all certain to spur even more disposals of equity ownership and separate NPL portfolios across Emerging Europe.
The CEE markets witnessed increased PE interest in 2016 – the combined value of PE entries and exits more than doubled to €28.4bn. Overall, PE entries were double the exits.
One sign of the region’s growing self-confidence is the number of deals which are not reliant on outside investors. Many domestic companies and private equity firms have reached a size where they can conduct cross-border deals of their own. Russia (575), the Czech Republic (159), Poland (146) and Turkey (112) were among the most active.
“Emerging Europe M&A Report 2016/2017” shows trends in CEE countries in 2016 combined with forecasts for 2017. For more information please see: cms.law
*based on EMIS League Tables 2012-2016
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For further information, please contact: Darina Gordienko, CMS Cameron McKenna, E:firstname.lastname@example.org/+38044 3913377
Information about CMS:
Founded in 1999, CMS is a full-service top 10 international law firm, based on the number of lawyers (Am Law 2016 Global 100). With 65 offices in 38 countries across the world, employing over 3,400 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 EUR 1,01bn in 2015.
CMS provides a wide range of expertise across 19 expert practice and sector areas, including Corporate/M&A, Energy, Funds, Lifesciences, TMC, Tax, Banking and Finance, Commercial, Competition & EU, Dispute Resolution, Employment & Pensions, Intellectual Property and Real Estate & Construction.
For more information, please visit cms.law
CMS offices and associated offices: Aberdeen, Algiers, Amsterdam, Antwerp, Barcelona, Beijing, Belgrade, Berlin, Bogotá, Bratislava, Bristol, Brussels, Bucharest, Budapest, Casablanca, Cologne, Dubai, Duesseldorf, Edinburgh, Frankfurt, Geneva, Glasgow, Hamburg, Hong Kong, Istanbul, Kyiv, Leipzig, Lima, Lisbon, Ljubljana, London, Luxembourg, Lyon, Madrid, Medellín, Mexico City, Milan, Montenegro, Moscow, Munich, Muscat, Paris, Podgorica, Prague, Rio de Janeiro, Rome, Santiago de Chile, Sarajevo, Seville, Shanghai, Sofia, Strasbourg, Stuttgart, Tirana, Tehran, Utrecht, Vienna, Warsaw, Zagreb and Zurich.
Information about EMIS:
EMIS operates in and reports on countries where high reward goes hand-in-hand with high risk. We bring you time-sensitive, hard-to-get, relevant news, research and analytical data, peer comparisons and more for over 120 emerging markets. Our information platform provides a unique blend of analysis, data and news on companies, industries and countries. We license content from the cream of the world's macroeconomic experts, the most renowned industry research firms and the most authoritative news providers. We combine this with our own company and M&A research to offer a multi-faceted view of each emerging market. Formed over 20 years ago, we employ nearly 300 people in 13 countries around the world, providing intelligence to nearly 2,000 clients. We are part of Euromoney Institutional Investor plc. For more information, please visit www.emis.com