Investing in CEE: Inbound M&A report 2020/2021

Key findings:

• The M&A market performance in the CEE region in 2020 was solid. Even as volume dropped by 16% – to a total of 648 transactions, down from 768 in 2019 – total disclosed deal value rose by 11% to €49.2bn.
• The four CEE countries with the highest deal values remained the same as in 2019 – Russia, Poland, the Czech Republic, and Austria. M&A deals done by strategic or financial investors also took place in Hungary, Romania, Slovakia, Bulgaria, Ukraine and the Adria region.
• Private equity remained exceptionally active in 2020 – total disclosed buyout volume jumped up by 40% year-on-year to €3.9bn with 68 transactions, compared to 71 in 2019. Private equity exits fared even better, with total disclosed value coming to €8.1bn, a 11% rise on 2019 – although volumes dropped 10% to 55 deals.
• The region continued to attract a strong and steady flow of inbound investment from around the world, particularly Western Europe and North America; €23.9bn flowed in from outside of the region across 2020.

The combination of competitive advantages makes the region attractive for investors: a higher degree of 

• political, economic and judicial security than many emerging markets, access to the huge EU market, satisfactory returns on investments, a skilled, multilingual workforce and growing middle class.
• The technology sector had the highest number of inbound deals to the CEE region in 2020, hitting a total of 57 – up from 51 the year before. In terms of total deal value inbound to CEE, energy and utilities continued to be the top sector, having seen a total deal value of €9.1bn – a 20% rise year-on-year.

Outlook for the coming months

The perspectives for upcoming months are relatively positive. The outlook is for a rebound in 2021, supported by roll-out of vaccines and continued government support for economies. CEE is well-positioned to benefit from the post Covid-19 period, with industrial nearshoring, succession planning, PE funds activity and market consolidation in selected sectors being the main drivers of that trend.

To find out more, download the full report below.