“In spite of extraordinarily difficult circumstances, M&A activity in emerging Europe has proved remarkably resilient, maintaining a steady pace, and comparing favourably to pre-pandemic levels. While this is an encouraging picture, the decrease in deal values shows that dealmakers are more cautious in light of the current economic situation and the lengthening conflict in Ukraine,” said Horea Popescu, Head of CEE Corporate M&A practice, CMS.
Data shows that Romania recorded the second highest number of deals in Emerging Europe in 2022, with 234 transactions, a 20% increase versus 2021. By value, the deals amounted to EUR2.9 billion, the third highest score after Poland and Croatia.
“Romania remained one of the region’s top performers in 2022, recording sustained growth both in terms of volume (approx. +20%) and value of transactions. The Real Estate & Construction sector reached a deal value of over EUR1.5 billion, Manufacturing ranked second with approximately EUR680 million, and Telecoms and IT continued to remain at the top with an estimated total value of EUR 190 million. We remain relatively optimistic about the outlook for the new year as well, expecting further deals to strengthen the status of the Romanian market in the region,” said Rodica Manea, Partner Corporate M&A CMS.
The United States continues to be the most active foreign country investor with 126 deals in 2022. European investors continue to show a keen appetite for deals in emerging Europe and, by deal activity, the top three European investors were the UK (88 deals), Germany (74 deals) and Austria (55 deals). In contrast, Austria, France and the United Kingdom topped the charts for investor deal value in first, second and third place respectively.
Cross-border deal activity was a strongpoint, up from 743 to 815 deals, although values fell from EUR38.2 billion to EUR22.7 billion. Domestic deal volumes slipped marginally from 421 to 414, while values more than tripled to EUR10.3 billion. Within Emerging Europe, the largest investor countries were Poland (EUR10.3 billion), the Czech Republic (EUR 3.1 billion), Hungary (EUR1 billion) and Romania (EUR753 million).
“There are many uncertainties and new challenges, but as the macro-economic situation stabilises, we are likely to see again more transactions coming to the market in the medium term. While we cannot expect easy times, the data shows that we can be optimistic that activity will continue to perform strongly, particularly in sectors such as IT, energy and manufacturing. The current economic situation is likely to bring corporate carve-outs and restructurings, which may provide further transactional opportunities,” said Radivoje Petrikić, Corporate Partner, CMS Vienna.