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68 I Central Europe bne February 2022
Emerging Europe M&A soars by 55% to €94bn in 2021
bne IntelliNews
Mergers and acquisitions in Central and Eastern Europe recovered to pre-pandemic levels in 2021, rising by 18.2% in terms of volume and by 55.1% in terms of value, according
to the Emerging Europe M&A Report 2021 by law firm CMS and information platform EMIS published on January 27.
CMS called 2021 “a year of rebound and recovery for dealmakers in emerging Europe”, after 2020 was blighted by the pandemic. In 2020 deal value had fallen for the third year in a row and there had been the lowest number of deals in the 10 years CMS had been publishing the report.
Last year, by contrast, with 2,015 transactions, deal numbers exceeded those of 2019 (1,958), while overall deal value reach its highest level since 2013 at €94.27bn as low interest rates and
big cash piles pushed up valuations. The region (which for the report includes Turkey) has now experienced five consecutive quarters with deal values well over €20bn.
“M&A activity in emerging Europe experienced a resurgence in 2021, with buyers and sellers appearing to recover their confidence at the prospect of the pandemic being brought under control,” said Horea Popescu, head of CMS’s CEE Corporate M&A practice.
Looking ahead, Radivoje Petrikic of the CEE Corporate Practice said: “Although uncertainty about the impact of new variants and the prospect of economic fallout from higher inflation has led to
a more cautious end to the year, our findings show that dealmaker confidence has largely been restored. In 2021, the main drivers of deals were long-term underlying trends, such as digitalisation, and with the pace of change and shift
to digital continuing to accelerate, the fundamentals for an active dealmaking market remain firmly in place.”
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The two biggest deals last year were US Norton Lifelock’s €7.34bn takeover of Czech anti-virus software company Avast Software, and Russian Sibur Holding’s €6.08bn acquisition of petrochemical company Taif Group.
It was a record year for IPOs, as the number of listings surged to 116 (up from 26) and values jumped to €13.47bn (up from €4.79bn). Six out of the 10 largest IPOs happened on international exchanges, where they raised nearly €7bn, including the €3.22bn listing of Poland’s parcel locker company InPost in Amsterdam and the €1.48bn listing
of Russian retailer Fix Price Group on the LSE. At the regional exchanges the largest listings were those of Pepco Group (€825mn) and Huuuge Games (€367mn) in Warsaw, as well as United Medical Group (€423mn) in Russia.
Telecoms and IT accounted for five of the 10 biggest deals of the year and registered the highest overall deal value at €23.4bn. Transaction numbers rose to 450 (up from 333). Significant Telecoms deals included
Private equity
Deals by value and volume
the sales of Polkomtel Infrastruktura and UPC Polska in Poland, and the sales of Ceské Radiokomunikace and a 30% stake in CETIN in the Czech Republic.
Notable software deals included the €7.3bn sale of Avast Software in the Czech Republic and the €1.6bn purchase of game developer Nexters Global by Kismet, both arising in Russia.
Real Estate and Construction was the second-busiest sector, experiencing 340 deals (up from 310) and a 3.8% rise in deal value to €9.83bn.
Manufacturing was the third-busiest sector with 253 transactions (up from 236) and second by value at €18.26bn.
Mining, Oil and Gas was the third- largest sector by value at €10.59bn, though it was one of the few sectors where deal numbers declined (down to 105 from 124).
Growing investor interest in climate action helped drive up the overall number of