Buoyed by more than a 4% GDP growth across much of the region, together with increased foreign investment and private equity activity, Central and Eastern Europe saw healthy levels of M&A in 2018. However, concerns over a potential impending global economic slowdown are likely to impact M&A volumes in 2019, experts told Mergermarket.
Poland
Polish M&A saw a slight reduction in activity in 2018 as a result of fewer big-ticket deals. The coming year is likely to see deals in the EUR 20m-50m bracket dominate the market, according to Mergermarket intelligence, with a number of succession-driven companies coming to market.
While more SME deals are expected, the window of opportunity to sell EUR 10m-EUR 25m mid-cap businesses that lack the economies of scale, innovation and growth potential, will gradually close in the coming years.
Czech Republic
A strong macroeconomic environment, and a number of mid-sized targets mean the Czech Republic remains one of the most attractive countries in CEE, with M&A largely flat in 2018.
Aligned with global trends, activity targeting the Czech Republic is being driven by digitalisation and the need for innovative offerings. The potential merger of Czech banks Air Bank, Moneta Bank, and Home Credit is a clear example.
Baltics
While the Baltics reached its highest annual value since the financial crisis and the highest deal count on record, few local dealmakers believe this will continue through 2019. Last year’s figures were largely driven by Blackstone’s EUR 1bn investment into regional lender Luminor Group, and the likelihood of a similar deal is seen as unlikely.
Previously shelved plans in Estonia to privatise state-owned companies, such as postal service Omniva, may be revisited depending on parliamentary election in March, according to Mergermarket intelligence.
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