Romanian M&A barely reaches €1 billion

Romanian M&A market reached €1.045 billion last year, while 80 deals worth over €1 million were shelved, according to a Capital Partners report. As Capital Partners has been keeping track of mergers and acquisitions for one year only, the report doesn't indicate the decline rate in the deal activity. However, a Thomson Reuters research indicates that 86 deals were completed last year in Romania, worth $2.1 billion (€1.45 billion).Raiffeisen Investment pointed to €5.3 billion of mergers and acquisitions in Romania in 2008, 20% decline from a year earlier.

"The market is visibly climbing out of the frozen mode since December 2009, in terms of buyers and sellers' interest in engaging in a deal. But it will take long before it actually reflects in the deal activity: I expect the market to recover slowly in 2010, and I hope to break even at least this year", said Doru Lionachescu , Partner of Capital Partners private equity investment firm. Investors and financiers have clearly changed their approach to the emerging market M&A which should contribute to the recovery of the local market, Lionachescu continued.

The investment banker said he expects a poor deal activity in the first quarter. "The first quarter of a year is usually the period when terms are negotiated, and only in the second half the deal is actually executed." The biggest deals in the Romanian market have been the €250-300 million acquisition of AB InBev brewer by CVC PE investment fund, that included local operations, the acquisition of private clinic operator MedLife by Societe Generale Asset Management and of Profi retailer by Enterprise Investors.Other two large deals announced last year have been the takeover of minority interests of Fondul Proprietatea and Electrica in CEZ Distributie and CEZ Vanzare by Czech-based CEZ and the €270 million acquisition of Zapp mobile carrier by Cosmote.