CEE View: Inbound M&A Report 2018/2019

KEY FINDINGS:

• Compared to other emerging regions of the world, CEE proves to be a generally stable region for M&A investment. Sustained economic growth, a rising domestic consumption, attractive wage dynamics, closer ties with non-CEE markets and good quality assets have provided a solid foundation for M&A activity in the region.

• The total value of the M&A market registered in 2018 amounted to €46.9 billion, with a total number of 701 deals (figures based on transactions above €5 million). The robust performance and attractiveness of M&A in the region is evident, notably when speaking about countries like Austria, Poland, the Czech Republic, Romania, Hungary, Slovakia or the Adriatic region. Russia remains the largest M&A market in the region despite geopolitical sanctions.

• Across the CEE, the private equity (PE) industry is maturing, and buyouts have increased in value as sponsors eye high-quality assets in the region. PE funds deal value was up 83% in 2018 to €7.5 billion (81 deals registered above €5 million). International buyout firms have noted the attractive economic fundamentals and pricing in the region and stepped up to make sizeable investments, demonstrating PE confidence in CEE’s growth and stability.

• Inbound investments from outside the CEE represent 58% of the overall CEE M&A market value in 2018, a number which is more than doubled compared to the previous year.

• Major inbound bidders in CEE include investors from Western Europe (Germany, United Kingdom, France, Netherlands, Scandinavia, Switzerland, and Italy), the USA, but also more and more from Asia (China, South Korea, Japan).

• While the industrials and energy sectors stood out, the region has a diversified economy and has generated deals across a range of industries. Industrials, technology, professional services, retail & consumer goods, food & beverage and energy & utilities performed particularly well in 2018. The financial services sector is generally robust, with consolidation in the banking sector underway. The CEE has also been an open testing ground for new fintech solutions, as consumer uptake of banking technology in the region is high.

• The region is obviously not without a few challenges: the consequences of the Brexit uncertainty, the US trade wars with the EU and China, the impact of sanctions on Russia and the tensions between the European Union and some CEE governments. 

• Overall, the outlook for 2019 and beyond appears positive with the next couple of months expected to be promising once again for domestic and international investors in CEE.

Interested in finding out more about the CEE M&A market? Download the full ‘CEE View: Inbound M&A report 2018/2019’ below.