The Romanian M&A market recorded the most significant increase among the 11 countries in Central and South East Europe (CSE), with estimated total value of transactions going from USD 0.6 billion in H1 2014 to USD 2.1 billion in the first half of 2015, according to the latest study by EY, the M&A Barometer.
This spectacular rise of 250 percent year on year was mainly due to the fact that Romania also recorded the highest transaction in the CSE region this year – the acquisition of UniCredit Tiriac Bank by UniCredit SpA Italy, for over USD 770 million.
Meanwhile, the number of transactions increased from 68 in the first half of 2014 to 81 deals in the first half of the year. In terms of value of transactions, the most attractive sectors in Romania were the energy and mining sectors, according to the report results.
In the first half, the majority of transactions were concluded by strategic investors, accumulating 80 percent of all transactions in our country. The Romanian M&A market was again dominated by inbound transactions, 62 percent of transactions involving foreign companies who bought local ones.
Only 8 percent of transactions made public were made by Romanian investors who acquired foreign companies – one of the lowest percentages in the region -, while the remaining 30 percent of transactions were internal M&A, in which both the buyer and the target originated in Romania. Most inbound transactions were made by investors from the United States (6) and the Netherlands (6), followed by investors from Cyprus (4), Great Britain (4), Italy (3) and the Czech Republic (3).
“Romania was confirmed as a very attractive market in the region, through both macroeconomic performance and the geostrategic position. In the future, we expect the energy sector to attract major investors through the potential of new energy sources. We expect also to a strengthening of the financial sector and increased healthcare, entering the second wave of investment,” said Florin Vasilica, transaction advisory leader of EY Romania.
The market for mergers and acquisitions in the CSE region (Bulgaria, Czech Republic, Croatia, Greece, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey) grew as a whole by 2.9 percent. The number of transactions in the region increased in the first half of 2015 to 647 transactions, from 629 in H1 2014.
Most transactions were concluded in Turkey (155 transactions), followed by Poland (117 transactions) and the Czech Republic (98 transactions). Only four of the 11 countries in the region reported declines in the number of transactions completed – Croatia, Czech Republic, Bulgaria and Serbia. However, the average transaction value of USD 100 million decreased by 2.2 percent year on year, while the average value of the most frequent transactions of under USD 100 million increased by 1.6 percent. This resulted in a decrease of 10.8 percent of the estimated value of the M&A market in the region.
Investors from Western Europe and the US continued to hold the largest share in the region in the first half 2015, though the number of transactions by foreign investors was lower than the ones involving local investors.
US investors were the most active in this period, with 36 transactions closed in the region, followed by UK (29 transactions), Germany (26 transactions) and Austria (11 transactions). It is also noteworthy that the transactions were dominated by strategic investors and the most attractive industry was IT, while in terms of value, the largest transactions took place in the banking and financial services.
EY employs 212,000 in over 700 offices in 150 countries and a turnover of some USD 28.7 billion in the fiscal year ended June 30 2015. EY Romania became active in 1992 and has offices in Bucharest, Cluj-Napoca, Timisoara and Iasi. Over 650 employees in Romania and Moldova provide seamless assurance, tax, transaction and advisory services business for multinational and local companies.