M&A Barometer - Romania 2011
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26 Ianuarie 2012 |
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ERNST & YOUNG S.R.L. |
Adresa
Strada Dr. Felix Iacob, Nr. 63-69
Cladirea Premium Plaza, Etaj 15
011033 Bucuresti, Sector 1
Telefon
+40-21-402.40.00
Fax
+40-21-310.71.93
Website
www.ey.com
Introduction
Our Barometer captures the number and value of the Romanian market of mergers and acquisitions during 2011, emphasizing the prevailing trends in terms of most active industries, profile and country of origin of buyers.
During 2011 the Romanian M&A market experienced a slight increase of 5% in terms of number of closed deals (from 114 deals in 2010 to 120 deals in 2011). However, the size of the market decreased by 28% in terms of extrapolated sum of deal values compared with 46% based on disclosed deal values.
The fact that the Romanian M&A market did not “come-back” during 2011 still reflects the significant gap between value expectations of sellers and buyers, as well as the financial tensions in the Euro-zone. Continuing the trend from 2010, insolvent and distressed companies led the way in transactions during 2011. The appetite for takeovers in 2011 was not as strong as envisaged due to the limited economic growth and a low consumer spending in 2011.
Outlook 2012
M&A market is expected to record an upward trend in 2012, as long as economic recovery would materialize in Romania. At current times, rumors of upcoming large transactions in 2012 envisage planned privatizations under IMF pressure. However, we do not expect that such transactions would reach completion before the end of 2012.
The largest transaction that is expected to be completed during 2012 would probably be the takeover of the Romanian agriculture fertilizer producer Azomures and of its subsidiary Chimpex by Ameropa, as well as the privatization of Cupru Min Abrud (copper mining industry) that is expected to conclude in spring 2012 via open auction.
Estimated market value for 2011
Based on our estimates using publicly available data, the extrapolated size of M&A market in Romania decreased by approximately 28% from USD 1,264 million in 2010 to USD 909 million in 2011.
Transaction values were disclosed only for 54 deals, resulting in a disclosure rate of 45%, lower compared to last year (i.e. 55%).
Total aggregated value of disclosed deals reached USD 383 million in 2011, a 46% drop as compared to USD 712 million during last year. This has also been influenced by a lower disclosure rate year on year.
Cross-border deals involving Romanian targets (totaling USD 851 million in 2011) have not been included, otherwise the size of the M&A market would have been much larger.
Type of investors
Domestic strategic investors dominated the Romanian M&A market 2011, although the share of financial investors increased from 28% in 2010 to 35% in 2011.
In 2011, the number of domestic deals was slightly larger than that the number of deals originated by foreign companies (i.e. 60 domestic deals versus 57 inbound deals). While in 2010 the number of inbound investments outpaced domestic transactions (63 inbound versus 50 domestic).
Origination of inbound investments included Germany, Austria and the USA (new entry in top 3 foreign investors by number of deals), each with 6 deals, followed by the UK with 4 deals, and Luxembourg with 3 deals.
