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M&A activity in Romania to continue expanding in 2017 - PwC

M&A activity in Romania to continue expanding in 2017 - PwC Kritchanut/Shutterstock.com

BUCHAREST (Romania), March 22 (SeeNews) - The Romanian market of mergers and acquisition (M&A) will continue to grow in 2017, and sectors such as medical, industrial and fast moving consumer goods will continue to consolidate and attract new investments, global consultancy PricewaterhouseCoopers (PwC) said on Wednesday.

Another reason for the expected growth of the Romanian M&A market this year is the tendency for companies that had developed production capacities in Asia to relocate them towards Eastern Europe, including Romania, PwC said in a press release.

"We can feel a certain effervescence in the local market, many negotiations and discussions are being carried, and more transactions are being initiated by both sellers and buyers," PwC transactions team leader Cornelia Bumbacea said. "We see a growing number of entrepreneurs interested in the prospect of selling their company, which helps them receive an indication of the market value of their business."

An important condition for the growth of the M&A market in 2017 is fiscal predictability, PwC noted.

"Strategic M&A projects, which require a long-term commitment, can be encouraged by improving fiscal policy predictability and consistency”, PwC tax and legal services leader for Romania and South Eastern Europe, Mihaela Mitroi, said. Tax issues are becoming increasingly important for business management and the handling of certain tax issues and tax risks could even cause certain transactions to fail, she added.

Although there are few cases of Romanian entrepreneurs who have chosen to develop their businesses through acquisitions, the limits of organic growth, the need for rapid development backed by pressure from the competition, are pushing more and more Romanian companies towards development through acquisitions, PwC senior manager for the transactions services team, Grigore Ureche, pointed out.

PwC also noted that there is an increasing number of financial investors who are interested in the Romanian market, focusing primarily on businesses that have demonstrated a potential for sustainable development.

"The M&A market value and companies’ attractiveness will also increase in the wake of financial performance stabilization of businesses that are likely to be the subject of deals, and amid growing confidence in and predictability of the development prospects for the next 5-10 years", PwC senior manager for transactions services teams, Dragos Atanasiu, said.

The Romanian M&A market registered 140 transactions worth a combined 3.6 billion euro ($3.8 billion) in 2016, according to the press release.

"We can notice an apparent lack of correlation with the global market, which declined slightly in the same period. This is due to the fact that last year the local market value was strongly influenced by a small number of transactions with substantial value. Another explanation would be the increasing competitiveness and attractiveness of Romania’s economy in the regional geopolitical context", M&A team coordinator at partner D&B David and Baias Anda Rojanschi said. D&B David si Baias is the affiliated law firm of PwC Romania.

London-headquartered PwC is a multinational professional services network, which is present in Romania since 1991.

During last year, PwC was involved in several significant deals, providing buy-side or sell-side advice, such as Regina Maria buying Ponderas hospital, Oresa ventures buying La Fantana, Mid Europa Partners acquiring Profi, Logo buying TotalSoft, and Enterprise Investors acquiring Noriel.

($ = 0.9259 euro)

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