Ellex Baltic M&A Monitor 2024: Baltics record lively year of dealmaking in the face of international headwinds

The Baltic M&A Monitor, a new report published by law firm Ellex in association with Mergermarket, recorded a total of 134 deals worth €1.1bn in 2023, the third-highest volume since 2008.

While volumes dropped 12% from 152 and values 54% from an aggregate €2.4bn in 2022, that year was an unusually active one, as the European M&A market enjoyed a rebound from the pandemic and related global recession, supported in part by a glut of government financing.

“While 2023 did not break any records, Estonians should still be proud that 6 deals of Baltic TOP 10 deal chart were actually Estonian deals, including the highest value deal of 2023 – the acquisition of Latvian Gaso by Infortar. Also, the only IPO in the Baltic markets in 2023 was an Estonian one as we witnessed the listing of Infortar at the end of 2023. So, not a bad year after all for Estonian businesses” proudly presented Sven Papp, leading M&A partner of Ellex.“

Of all the deals announced in the Baltics in 2023, 43% involved Lithuanian targets, keeping the country at the top of the table in deal volume terms, albeit down slightly from its 46% share in 2022. Estonia’s share of regional M&A volume also slid, from 39% to 37%, while Latvia’s rose by five percentage points to 20%, its highest share since 2018 (24%).

Inbound international investors accounted for 41% of transactions by volume in 2023, down four percentage points from 2022. However, they contributed 59% of deal value, showing that while international investors tend to make fewer transactions, they generally focus on larger targets. Indeed, six of the 10 largest deals of 2023 involved bidders from outside the region.

Rūta Armonė, Partner and Co-head of Corporate and M&A practice at Ellex in Lithuania commented: “When big players come here, they show it’s a stable economy, a safe economy, not threatened by the war in Ukraine. It shows trust and confirms what we’re trying to show people: it’s a great region to invest in.”

In terms of sectors, technology, media and telecoms (TMT) took the top spot in M&A volume and value terms for the period 2022/23, contributing 26% of total deal activity, down only marginally from 28% in 2020/21 and almost half (49%) of aggregate deal value in the region – up from 45% in 2020/21.

TMT looks set to experience further activity in the year ahead. According to Mergermarket’s intelligence tool, of the 45 ‘companies for sale’ stories the platform is tracking in the Baltics, the most (14) relate to assets in TMT.

“There’s always interest in the tech sector,” said Sarmis Spilbergs, Partner, Corporate and M&A, and Head of the Technology, Media and Communications practice at Ellex in Latvia. “Now there is also the health-tech sector. Funds which have an ESG focus are looking into health, research and green technology. Our clients are exploring options to invest in scale-ups that want to grow more strongly.”

As we enter 2024, the global economic outlook is brightening. Inflation is dropping rapidly, with the expectation that interest rate cuts will follow. All three Baltic countries are expected to experience respectable growth in 2024.

To view the report, visit: HERE 

About Ellex

Ellex brings together the region’s three strongest and most highly ranked law firms from each of the Baltic states – Ellex Raidla in Estonia, Ellex Klavins in Latvia and Ellex Valiunas in Lithuania. Ellex has the largest and the most recognized Corporate and M&A team in the Baltics, leading for several years in succession by the value and number of transactions in Central and Eastern Europe. No.1 Law Firm in the Baltics by Prospera 2023. The most recent acknowledgment was being awarded as the Baltic Law Firm of the year 2023 and 2022 by IFLR Europe Awards and annually by Who’s Who Legal.

About Mergermarket

Mergermarket blends market-leading human insights, advanced machine learning and 30+ years of Dealogic data to deliver the earliest possible signals of potential M&A opportunities, deals, threats and challenges.

Visit mergermarket.com.