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bne May 2021 Companies & Markets I 7
M&A hits €8.5bn in CEE in Q1, says Mergermarket
Iulian Ernst in Bucharest
Mergers and acquisitions (M&A) in CEE (excluding Russia and Turkey) in the first quarter hit €8.5bn, up by 50% year on year, according to data from Mergermarket released on April 15. The number of deals in Q1 was 115, just above the 109 in 1Q20.
The M&A value is the highest Q1 figure since 2013, the data and intelligence company said, and was boosted by several large transactions by foreign investors. Foreign investments represented 86% of deal-making by value, accounting for €7.3bn across 60 deals. The region’s top deals were both in Poland, with Allianz's €2.5bn acquisition of Aviva Poland, followed by Cellnex Telecom’s €1.6bn purchase of Polkomtel Infrastruktura.
Fund transactions soared to €1.5bn across 18 deals, compared to €65mn and eight deals a year ago. The biggest fund transaction was Partners Group’s €800m buyout of Fortum
Foreign investments represented 86% of deal-making by value, accounting for €7.3bn across 60 deals.
Oyj, a Baltics-based district heating business. There were only 17 fund exits, worth €148 mn, compared with eight exits worth a much higher €1.9bn in 1Q20.
Mergermarket's annual 2020 survey with Wolf Theiss had also shown surprisingly strong deal flow despite the coronavirus (COVID-19) pandemic, with trends towards bigger deals and a higher proportion of private equity deals.
Mergermarket said intra-CEE M&A remained stable, with 62 transactions worth €1.2bn, compared with 58 deals worth €1.2bn in 1Q20.
It said financial services was the busiest sector by value, with 11 deals totalling €3bn representing 36% of the overall total. Technology was the most active sector by deal count, with 26 deals totalling €551mn.
wiiw raises 2021 CEE growth forecast to 3.8%
Robert Anderson in Prague
Central and Eastern Europe’s economic recovery will be strong but delayed, because many countries have had to reimpose lockdowns to contain the coronavirus (COVID-19) pandemic, said the Vienna Institute for International Economic Studies (wiiw) in its spring forecast.
It has revised upwards its forecast for growth for the region this year to 3.8%, having predicted 3.1% GDP growth in its autumn forecast.
With the recovery beginning in the middle of the year, the wiiw predicts most of the region (which for it also includes Turkey and Kazakhstan) to return to pre-crisis levels of GDP by the end of the year, but with great differences in pace. Several countries in the Western Balkans will only regain their previous GDP levels in 2022, and Montenegro not until 2023.
In terms of economic growth, CEE mostly did better than
Western Europe last year, falling only 2.3% overall, with the main exceptions being tourist-dependent countries such as Croatia and Montenegro.
However, the region has been badly hit by the second wave of the pandemic, and the wiiw expects growth to be lower than Western Europe this year and barely level with it next year. “Only in 2023 will the convergence process start again in our region,” Richard Grieveson, deputy director, told a webcast.
The strongest growth is forecast in Southeast Europe, helped by a recovery in tourism and a bounce back from a steep downturn last year (which was worse for the Western Balkans than that of 2008-9). The highest growth is forecast in Montenegro (6.5%), Turkey (5.8%), Serbia (5%), Kosovo (4.8%), Croatia (4.5%) and Albania (4.5%), followed by Romania (3.8%) and Slovenia (3.6%). There is expected to be a weaker performance in Bosnia and Herzegovina (2.5%) and Bulgaria (2.5%).
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