Transactions in CEE remain at extremely stable level: report

The disruptions caused by Covid-19 in the CEE M&A market were short-lived and dealings returned to normal in the second half of the year, according to a new report published by Mazars in partnership with Mergermarket.

The report provides an overview of M&A activities in Central and Eastern Europe in 2020 and examines the challenges and opportunities in the coming months.

The value of transactions in the CEE region increased by 11 percent to €49.2 billion compared to 2019, although their volume decreased by 16 percent, which gives a total of 648 transactions. The increase in transaction value, despite the global pandemic, underlines the power of attracting investors interested in large transactions across the region. Excluding Russia, the largest economy in Central and Eastern Europe, there was a 28 percent increase in the value of transactions in 2020 y/y.

The region continues to attract international buyers as they account for 49 percent of the total transaction value – they have invested €23.9 billion – similar to previous years.

Private equity funds continued to be extremely active in 2020 with the total amount of disclosed buyouts in the region showing a 40 percent increase y/y, reaching €3.9 billion. Private equity exits also fared well, with total disclosure of €8.1 billion, an 11 percent increase from 2019.

With the introduction of vaccination against Covid-19, it is hoped that the trading environment will be more stable in the second half of 2021. However, the risk of new waves of the virus, international disputes, and unexpected economic shocks are still present.

"Thanks to strong fundamentals, Central and Eastern Europe has proved to be relatively more resilient than other emerging markets in terms of trading. The region is now well-positioned to benefit from the post-Covid periods, which will be marked by, among other things, a strengthening trend nearshoring the industrial supply chain from Asia to this region

succession planning, private equity investments, and further consolidation of selected sectors will be the main focuses of M&A activity this year," Michel Kiviatkowski, leader of financial advisory services for Central and Eastern Europe, Managing Partner of Mazars in Poland, said.

(WBJ)