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October 23, 2021

E&Y: Romanian M&A market advanced by 86 pc in H1 2012

The value of the Romanian market of mergers and acquisitions increased by 86 pc, to USD 901 M, while the average value per transaction advanced by 67 pc in the first half of 2012, according to the ‘M&A Barometer’ report released by Ernst & Young yesterday. The investments during this interval came from the USA (7 transactions) Germany, Italy, the United Kingdom, Spain, France and Switzerland (2 transactions each). Germany, traditionally the main investor, was replaced by the USA. On the other hand no outbound Romania investment was reported, hinting that local players are more concentrated on consolidating their businesses at home. In the first 6 months of the year, the Romanian M&A market was divided almost evenly between foreign and local investors. The percentage of foreign investors increased by 9 pc in the total number of investors active in the market, which proves the fact that they are monitoring Romania in search of attractive targets. However, the percentage of investment and private equity funds decreased from 39 pc in H1 2011 to 19 pc a year later. According to E&Y, this proves the problems encountered by financial investors in identifying interesting targets that suit their portfolio in Romania, as well as the intent to sell investments that matured.

Forecasts for the second half of 2012

The important transactions expected for the remainder of the year referred to the privatisation operations planned through the accord with the IMF. However, given the short time until the end of the year, the completion of these privatisations in 2012 is uncertain. In the present context of prolonged uncertainty in the euro zone and of the upcoming elections, companies and investors will probably be more cautious in making decisions on mergers and acquisitions. Agribusiness, the sector that gave the largest transaction in the first half of the year, will continue to drive the M&A market on a medium term. Plus, the acquisition of eMAG by Naspers, announced in July, which could exceed EUR 100 M, and the purchase of eJobs by Ringier demonstrates the potential of the online sector, with impact towards the end of 2012 and especially in 2013, the E&Y report concludes.

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