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Here are 5 reasons why CEE M&A has remained broadly in line with 2018’s figures amid global concerns.
Year-to-date deal value across the CEE rose 3.1% reaching €10.25bn across 175 transactions. This is compared to 212 deals worth €9.94bn recorded in the same period a year earlier according to Mergermarket’s Global and Regional Trend Report. Keep reading to find out why:
1. Inbound M&A retains its dominant standing
Inbound M&A generated €7.4bn across 78 transactions in the region. Domestically, only €2.8bn worth of activity took place over 97 local deals. The region’s macroeconomic environment remains positive attracting foreign investors to the region amid high levels of uncertainty over political and economic turmoil elsewhere.
2. Strong consumer spending
Strong consumer spending as a result of the positive economic outlook in the region is likely to stimulate deal-making in the retail sector. Bankers have highlighted to Mergermarket the brewing and canning as well as chocolate manufacturing as industries as ones to watch.
3. Mid-market succession deals stay in focus
Mid-market succession deals, ample liquidity and high valuations are driving private equity deals which remains encouraging, particularly in the manufacturing sector.
4. Czech companies’ acquisition appetite is high
56% of Czech companies are planning an acquisition in the next 12 months according to a recent EY M&A survey. Record-high property prices and falling yields are shifting investors' focus to corporates and start-ups according to M&A advisers.
5. Healthy valuations encouraging company owners to the market
Many company owners now believe now is the time to come to the market amid signs of a slowdown in neighbouring Germany. Economic uncertainty ahead is driving vendors to conclude deals sooner rather than later.
Central Eastern European M&A trends will be discussed at the 2-day CEE M&A and Private Equity Forum on 1st and 2nd October in Warsaw. Click here to find out more.
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