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Austrian M&A drops 66 per cent

Austrian M&A has seen a total of 51 announced deals valued at USD2.6bn so far in 2009, representing a drop of 66 per cent by value and 37 per cent by volume compared to the first three quarters of 2008, according to mergermarket.

The nine month period is the lowest since 2006 by value and 2003 by number of deals.

Domestic activity during Q1-Q3 2009 decreased significantly as a percentage of total Austrian M&A involvement (31 per cent) compared to the same period last year (76 per cent).

Industrials and chemicals has been the most active sector by volume in Austria during Q1-Q3 2009, with 12 transactions accounting for 23.5 per cent of overall activity.

However, this figure represents a 54 per cent drop compared to the same period in 2008, where the sector again dominated with 32 per cent of announced deals (26 deals).

Germany firms remain the largest foreign M&A player in Austria with over 50 per cent of activity by both value and by volume, closing ten deals worth USD1.3bn. Germany is also the destination for Austrian companies looking to buy outside their domestic market, with nine transactions valued at USD1.4bn.

CEE targets together contribute 26 per cent of Austrian outbound M&A activity this year, with seven transactions announced, illustrating Austria’s focus in its neighbouring countries.

According to mergermarket, the construction industry is likely to remain active. At the time of release a situation surrounding the listed Austrian mid-cap construction group A Porr continued to unfold. Porr’s main shareholder B&C Stiftung may have to launch a mandatory takeover offer or sell shares in the company as its shareholding now stands 38.7 per cent after a capital increase. Porr has a market cap of EUR 200m.

Austria’s financial services sector has seen at least one large deal materialise in the first three quarters of this year. A 62.5 per cent stake in Unternehmens Invest was bought by Buy-Out Central Europe II Beteiligungs-Invest for USD 111m. Going into the last quarter of the year, the sale of privately-held Constantia Privatbank to Germany’s Hauck & Aufhaueser could be finalised.

While not represented in Austria’s top ten deals in the first three quarters this year, the real estate sector could see some increased activity should the merger of listed real estate funds Immofinanz and Immoeast go ahead as stipulated by its shareholders in a recent company announcement.

Deutsche Lufthansa’s successful takeover of Austrian Airlines from the Austrian State brings the transportation sector in Austria to the fore. It has recently been
reported in the Austrian press that Rail Cargo Austria, a subsidiary of the state-owned Austrian railway group Oesterreichische Bundesbahnen, is being prepared for a partial privatization. OMV, the Austrian oil and chemicals group, is looking to acquire up to 54 per cent in the listed Turkish petrol station chain Petrol Ofisi from listed Turkish conglomerate Dogan Holding. This could be one of the biggest transactions of the year.

Goldman Sachs jumps 12 places in the rankings from 2008 and takes top spot in the financial adviser value tables with a total value of USD3.9bn and three deals. The
American bank is followed by JPMorgan and Renaissance Capital, sharing second place with a value of USD1.9bn and one deal each. All three banks advised on the largest Austrian deal of the year, OJSC Surgutneftegaz’s USD1.9bn acquisition of OMV’s 21.2 per cent stake in MOL Hungarian Oil and Gas.

Deloitte topped the financial adviser volume table having been mandated on five deals valued at USD9m.

In the legal adviser league tables, Wolf Theiss retains its first position by value, having advised on four deals valued at USD2.1bn. DLA Piper jumped from 23rd position last year to second place, advising on USD1.9bn worth of transactions.

Austrian law firm Schoenherr Rechtsanwaelte tops the volume table having advised on six transactions with a total value of USD662m. The lawyer firm is followed by its local competitor, Wolf Theiss, with four deals.

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