“The key factor for the success of future transactions will be the efficiency of the actions taken by companies during this period and their positioning towards the future,” said Florin Vasilica, EY Romania Strategy and Transactions Leader.
The local M&A market made an unexpected comeback in the second half of 2020 after a significant slowdown in the first half, affected by the Covid-19 pandemic, which generated delays or transaction freezes.
The energy sector remained the most attractive to investors, supported by the interest in renewable energy, where the largest transactions were recorded, as well as by the IT sector, a leader in terms of adaptability to the new business environment. Traditional sectors such as real estate, agribusiness and services continued to be active.
“There is still an appetite for transactions, especially on the acquisition side, with investors seeing opportunities within this area and during these times,” said Vasilica.
Globally, following a roller-coaster year for mergers and acquisitions, the increase in year-over-year (YoY) value of deals recorded since the beginning of the third quarter is likely to continue into 2021, as companies position themselves for improved economic activity and re-frame their future for the post-pandemic era, EY said in its study released Tuesday.
With an overall value of $2.9 trillion, global M&A in 2020 is tracking below the 2019 value of $3.3 trillion but still ranks fifth for value of deals in the post-global financial crisis period.
The most active sectors were technology, media and entertainment and telecommunications with 5,755 deals valued at $973 billion (up 6% YoY), financial services with 901 deals valued at $352 billion (up 8% YoY), and power and utilities with 525 deals valued at $142 billion (up 34% YoY).
Sectors that have been most exposed to the Covid-19 pandemic have seen a more marked slowdown in 2020, as a result of lockdown restrictions and economic slowdown. The industrials sector (down 18% at $262 billion compared with 2019) and the consumer sector (down 16% at $156 billion during the same period) were particularly exposed.
Looking ahead to 2021 and beyond, the sectors that showed deal-making restraint during the Covid-19 pandemic will drive the next wave of activity, according to the research.