Ellex Transaction Radar 1HY: new economic cycle has started
After two years of downward trends, the transaction market has turned positively into rise – new economic cycle has started and investment courage is back! Ellex Transaction Radar summarises the most important trends of the transaction market in Estonia in the first half of the year, while also offering forecasts for potential developments in the upcoming periods. Transaction Radar is published twice a year.
Situation in Estonia
The recovery seen in the IV quarter of 2023 continues and the trend is clearly positive for the number of transactions – compared to the same period last year, there were 28 more transactions in the first six months of the year (94 vs 68).
In the first half of 2024, a total of 94 transactions were registered in Estonia, divided as follows:
- 36 venture capital and technology transactions
- 5 major real estate transactions
- 4 share issues (incl. OTC issues)
- 49 traditional M&A transactions
Global situation
Globally there have been several major transactions – five transactions worth in excess of $10 billion have been made in the natural gas and oil sector, which is an indication that although the introduction of renewable energy and a greener worldview are important, we still need fossil fuels to burn or as raw material in the chemical industry. Particularly active is ConocoPhillips who in addition to Burlington is also acquiring Marathon Oil for $22.5 billion.
Main challenges in 2024
The biggest challenge for companies in 2024 seems to be the continued uncertainty in the markets, which forces to caution with expansion plans and investments. Please read more about the challenges here page 10.
In summary, the recommendation would be that if there is intention to sell a company, now is the right time to start preparing. And if the intention is to anticipate the market as a buyer and get something for less money, you should already act quickly. There is still active interest in the renewable energy sector where consolidation as well as the sale of companies can be expected. Estonians have always been a “real estate nation” but it seems that this sector will remain in recession also in 2024. Troubled times have always given the domestic capital an opportunity for transactions over the more cautious foreign capital.
Commentary by experts Risto Vahimets, Sven Papp, Dmitri Rozenblat, Rutt Värk, Karl Rudolf Org | Ellex in Estonia.
