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M&A deals in CSEE rise to $43.1 bln in 2015 driven by IT sector, manufacturing - EY

M&A deals in CSEE rise to $43.1 bln in 2015 driven by IT sector, manufacturing - EY Mark Rubens/Shutterstock.com

SOFIA (Bulgaria), March 22 (SeeNews) - The value of merger and acquisition (M&A) deals in Central and Southeast Europe (CSEE) rose 16.6% last year to 43.1 billion dollars ($38.4 billion), with IT and manufacturing as the most attractive sectors, global consultancy EY officials said on Tuesday.

The total number of M&A deals in the region last year went down to 1,281 from 1,304 in 2014, EY Bulgaria managing partner Diana Nikolaeva said during a media presentation of the latest M&A Barometer report for CSEE.

However, due to their small size, a large part of all deals remain outside the radar of the screening companies, she noted, adding that the limited size of the local companies is the main drawback for investors. Low penetration in some sectors such as financial services, on the other hand, raises the region's appeal.

The survey excludes acquisitions of minority stakes of less than 15% from majority shareholders, privatisation deals, as well as bourse transactions, joint venture deals, greenfield investments, or licence acquisitions. It includes only deals whose price has been disclosed, based on enterprise value.

IT remains the most attractive sector for investors, absorbing $184 million of all investments in CSEE, followed by manufacturing with $167 million and services with $121 million.

Romania, the biggest market in Southeast Europe, saw deals worth $3.65 billion in 2015, up from $2.98 billion a year earlier. It is followed by Bulgaria with deals worth $0.97 billion versus $1.28 billion a year earlier.

Serbia is emerging as a hot investment destination in Southeast Europe with $0.94 billion in deals struck last year, sharply up from $0.23 billion a year earlier, Nikolaeva also said.

The biggest deal last year in Southeast Europe was the sale of Romania'a UniCredit Tiriac Bank for an estimated $771.4 million, followed by the acquisition of Serbia's Danube Foods Group for $657.1 million.

Unlike some seven or eight years ago when the region attracted financial investors mostly, the buyers now are predominantly strategic investors who wish to expand their operations, Nikolaeva also said.

Details about the M&A deals in some countries in Southeast Europe in 2015 follow:

  Value of deals (in bln of U.S.dollars) Number of deals Share of local investments (as % of total)
Bulgaria 0.97 50 62
Croatia 0.63 27 19
Romania 3.65 123 34
Serbia 0.94 45 60
Slovenia 0.67 38 53

($=0.8905 euro)

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