M & A deals and company listings failed due to crisis

Several transactions and stock market listings, worth a total €1.8 billion, were cancelled or delayed until further notice due to the international financial crisis, according to an analysis made by Business Standard based on market data. Financing access in the local business environment is almost frozen, as lenders restricted lending and blocked major loans. Furthermore, the loans that are granted became more expensive.

Distributor Interbrands and construction materials and decorations retailer Ambient, energy companies Hidroelectrica and Transelectrica and telecom operator Romtelecom are among the major companies that were forced to put their sale or listing plans on hold.

"Most investors blocked several transactions as they are waiting the companies' value to decline or because, although they had liquidities, they are facing problems in their home countries and they have to fill in the gaps there," according to Raiffeisen Investment Romania Managing Director, Ioana Filipescu. So far, companies' value dropped 30-50 percent due to the crisis, she added. "Before the crisis, the mergers & acquisitions market had great potential and a 15 multiple was easy to obtain. Now, however, a 7.5 percent multiple is great."

Business Standard