This provides an indication into what sectors have the potential to generate profits and economic growth in the years to come. Financial sector and construction, the industries of choice before the crisis are hardly seeing any interest now.
The signal sent by the deal whereby Naspers, the South-African media giant and one of the leading companies in the global online business, bought 70% in eMag, the largest online retailer in Romania, is that the Romanian IT&C sector is attractive and competitive enough to draw the attention and money of world class investors.
All the more reason since this is not Naspers’ first investment on the Romanian market, as it also bought autovit.ro and e-commerce solutions integrator Gecad ePayment last year, as well as a stake in website Fashion Days, which operates in Romania and other markets in the region.
“If we look at this Naspers-eMag deal only, a deal of such magnitude can drive up the total foreign direct investment in Romania by several percentage points in 2012,” said Marius Ghenea, chairman of Fit Distribution.
He added such deals could play an outstanding role in the Romanian economy, because, on the one hand, they would generate fast and sound growth of local entrepreneurial capital. On the other hand, regional expansion plans that such deals can serve as catalysts to, will generate additional growth in Romania, jobs, more revenue to the state budget derived from other markets in the region, therefore net growth of the Romanian economy, which is not cannibalizing other local operations or industries, Ghenea said.
The takeover of eMag by Naspers came several months after another important deal in the online industry whereby Tiger investment fund sold its stake in eJobs website to Swiss media group Ringier for an estimated EUR10 million.
Agriculture and companies operating in related fields have attracted the highest investments in the range of hundreds of millions of euros from foreign investors looking to gain from the increase in raw materials.
Swiss-held Ameropa group, a major grain trader, paid EUR250 million to EUR350 million to acquire control over chemical fertilizers producer Azomures. The acquisition of the chemical plant gives Ameropa control of the largest fertilizers producer of Romania and of harbor operator Chimpex Constanta, which it will use to export grain.
“The investments and acquisitions foreign investors make in Romania indicate the sectors in which the economy can be competitive in the future. The government and the authorities should identify the sectors that draw interest in good time and provide advantages to encourage development even more,” said financial analyst Dragos Cabat. “An example of support for foreign investment is stimulating accumulation of farming land.”
Renewable energy and especially wind power is a very attractive sector for foreign investors partly because of the very generous support scheme put in place by the Romanian government. The financial analyst warns that green energy has become a fashionable investment, and therefore not every project stands chances of becoming profitable.
“On medium and long-term, this sector of Romania will do well and I think it will export green power to markets in the region,” Dragos Cabat added.
Real estate has lost some of its attractiveness partly because banks are reluctant to finance such investment after losing quite a lot of money on loans to developers. However, a number of significant acquisitions were made this year. The top deal was the acquisition by investment fund NEPI of an office project from businessman Ovidiu Sandor for EUR90 million.
The financial sector only saw exists of investors from the local market such as the departure of Hungary’s MKB, which used to own Romexterra bank and UK’s Aviva.
(English version by Loredana Fratila-Cristescu)