M&A activity in 2020 in CEE at the lowest levels in the past 10 years

M&A activity in emerging Europe took a hit in 2020 as a result of the coronavirus pandemic with the volume of deals reaching its lowest levels in the past 10 years.

There were 1,705 deals with a combined value of EUR 60.80bn, down by 12.9% and 16% respectively from 2019.

In spite of the ongoing restrictions, the market showed signs of recovery towards the end of the year, producing the highest fourth-quarter deal value (EUR 24.28bn) since 2016.

Capital markets bounce back, PE holds steady

In what mirrored a global trend, there was a revival of investor confidence in the capital markets with 26 companies from the emerging Europe region listing for the first time, reaching a total value of EUR 4.79bn.

This was almost double the 14 IPOs in 2019 and represents the highest number of IPOs since 2015.

Private equity deal flow seemed to have withstood the difficult market conditions of 2020, and while cautious at times, held steady with 319 transactions (318 in 2019) and a decrease in value by 11.1% from 2019.

The financial services sector saw the biggest jump in the number of private equity deals, up from 15 in 2019 to 33 in 2020.

Since CMS first published the report, private equity funds have consistently grown their share of M&A in the region: in 2011, it accounted for 6% of the total volume of deals, rising to nearly one-fifth (18.7%) in 2020.

Foreign investors cautious but regional ones defy the odds

Foreign investors were more cautious as reflected by cross-border M&A deal numbers decreasing by 34.3% to 764 and values falling by 31.5% to EUR 35bn.

The US remained the largest foreign investor by volume, despite a 23% drop to 94 deals, while UK investors were the second most active with 72 deals, followed by Germany with 61 deals.

The opposite was true of domestic deal activity within countries in emerging Europe. Domestic deal numbers jumped 18.4% to 941 and 21.2% by value to EUR 25.8bn. Companies from Russia, Poland, Turkey and Czech Republic were the busiest dealmakers from within the region both in their own markets and abroad.

Romania registered 136 transactions (as in 2016 and more than in 2018, but 7 less than in 2019), with a volume totalling EUR 2.62bn (6.9% less than in 2019). However, almost half of this value was provided by a single transaction: the sale of CEZ assets worth EUR 1.2bn.

Leading sectors

Telecoms & IT was the most active sector by volume with 333 deals (up from 300 in 2019) and second by value at EUR 12.97bn, driven by the rapid acceleration of digitization and adoption of digital communications caused by the pandemic.

The sector accounted for six of the 20 largest deals in region, including the third largest of all, the EUR 3.7bn purchase of Poland’s Play Communications by France’s Iliad.

Mining (incl oil & gas) was the top sector by value at EUR 14.1bn despite falling deal volumes. While Real Estate & Construction dropped to second place by deal volume and third by deal value, the logistics and warehousing sub-sector saw a 38.5% increase in deals (from 39 to 54) in 2020, a trend demonstrating the need to support the growth in e-commerce.

The financial sector enjoyed 12 additional deals and a 39% rise in values, lifted by some of the region’s largest transactions including the purchase of the regional businesses of AXA by Uniqa Insurance of Austria and those of Aegon by Vienna Insurance Group.

Country hotspots

Poland was the only country where both deal volume and value rose in 2020 – 9.3% to 282 deals and 6.6% to EUR 11.7bn, respectively.

The country saw two landmark deals: the EUR 3.7bn purchase of Poland’s mobile operator Play Communications by France’s Iliad which was the largest Telecoms & IT deal, and Allegro’s IPO, the biggest company to list on the Warsaw Stock Exchange.

These figures and other findings are part of the CMS Emerging Europe M&A 2020 report.

- Advertisment -


Borussia Dortmund had over EUR 400 million revenues in financial year 2022/2023

In financial year 2022/2023, the lifting of COVID-19 pandemic related restrictions affecting Borussia Dortmund's business model led to an...