Romanian M&A market decreased 6.3 percent in volume during the first nine months of 2023

The Romanian mergers and acquisitions (M&A) market recorded 183 transactions (1) during the first nine months (9M) of 2023, representing a decrease of 6.2% compared to the same period last year. The estimated value of local M&A activity was also lower on a year-on-year basis, at USD 4.2bn (2) vs USD 5.2bn in 9M 2022 due to a 20% decrease in the value of disclosed transactions.

This evolution was in line with both regional and global trends, with European M&A deal value decreasing by around 40% during the same period, while global deal value slowed down by c. 30%. In this context, Romania shows greater resilience to global headwinds that have persisted for more than a year.

The largest deal observed during this period remains the sale of Italy-based Enel Group’s operations in Romania to Public Power Corporation, the main electric power company in Greece, for approximately USD 1.4bn. While no deals over 100m were announced during the third quarter, another notable transaction announced during the first nine months of 2023 was the acquisition of a majority stake by Bahrain-based fund Investcorp in NetRom Software, a leading software developer, for an estimated US$ 110m. Furthermore, Q3 2023 vs Q3 2022 deal activity has also decreased in Romania, with volumes down by 19.4% and estimated value by 41.7%.

Strategic investors continue to be the dominant players of the local M&A market, accounting for 87% of transactions during 9M 2023. Domestic transactions registered a 6.7% advance during this period when compared to the same timeframe in 2022, counting 95 transactions, while foreign players decreased their activity on the local market by 21.3% when compared to the same period, with 74 transactions. This suggests lower inbound activity was the main driver of the slowdown during this period. In terms of country of origin, the most active investors came from the United States, Austria and Switzerland (7 deals each), followed by Germany and Greece with 6 deals each.

Romanian M&A activity continues to benefit from positive drivers such as favorable GDP forecasts, a skilled multi-lingual workforce, a strong manufacturing base and availability of EU funding. The top five most active sectors by volume for the first nine months of the year were Real Estate, Hospitality & Construction (33 deals), Consumer Products & Retail (29 deals), Technology (26 deals), Advanced Manufacturing (19 deals) and Energy (17 deals).