Crystal ball

Report predicts 2014 increase in emerging Europe M&A deals

Deal flows in emerging Europe mergers and acquisitions are expected to increase in 2014, according to the Emerging Europe: M&A Report 2013/14 by law firm CMS and DealWatch.

M&A activity in emerging Europe in 2013 essentially remained flat in terms of deal volume and showed a moderate decline in deal value, falling from EUR138bn in 2012 to EUR112bn in 2013.
 
Last year the number of announced deals with a value above EUR1m dropped by two per cent to a total of 2,555 transactions. The most active sector by deal number in 2013 was services, with 484 deals representing 19 per cent of all transactions.
 
Mining (including oil & gas) was the leading sector in terms of deal value, with over EUR23bn accounting for just over 20 per cent of the overall market.
 
The largest transaction in the region was announced in the final days of the year – a 30 per cent stake in Russian construction firm Stroygazconsulting reportedly changed hands for over EUR3.5bn.
 
M&A in Russia accounted for 31 per cent of all deals in emerging Europe and 62 per cent of the total deal value in 2013. Poland came second with a 14 per cent share in deal number, followed by Turkey with 13 per cent. Financial M&A made up over 10 per cent of all deals in 2013 but the number of bank transactions in the region is likely to grow in the coming years as Western European lenders keep pulling back to boost their capital positions at home, and Greek banks are forced to shed assets.
 
Helen Rodwell, CEE corporate partner, says: “We expect 2014 deal-flow in CEE to be driven by increased appetite from foreign acquirers, followed by the availability of under-valued targets and private equity buyouts. On the sell-side, the biggest deal catalysts will be non-core asset sales, distressed M&A and exits by private equity funds reaching the end of their lifecycle.”

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