Outlook for Baltic M&A remains positive despite headwinds
A new report by Ellex and Mergermarket reveals that countries in the Baltic region – Lithuania, Latvia and Estonia – outperformed most other European economies in 2015, and the outlook for M&A activity in 2016 is positive despite headwinds including general euro area volatility, Russia’s slide into recession and continuing tension in Ukraine.
“Deal volume across the Baltics is well within the average for the region, suggesting that the appetite for quality targets remains undimmed,” says Sonja Caymaz, research editor at Remark, part of the Mergermarket Group. “And while overall value was down 46% to €558m in 2015, the year’s top three transactions – all Latvian targets above the €100m mark – totalled €410m, indicating that the region generates larger-sized opportunities,” Caymaz adds.
Sven Papp, Head of Corporate / M&A practice group at Ellex Estonia comments: “Deal volume was volatile in Estonia. However, smaller numbers do not necessarily mean less dealmaking appetite. A number of deals that should have closed by the end of 2015 actually closed at the beginning of 2016.”
Another key trend in Baltic M&A in 2015 was the amount of activity involving Nordic countries: 21% of inbound value, or €87m, came from the Nordics. Dovile Burgiene, Head of the Corporate and M&A practice group at Ellex Lithuania, adds: “The Baltic countries are more integrated into the Nordic market than they are with Central and Eastern Europe.”
Further key findings from the report include:
- In terms of sectors, energy, mining and utilities (EMU) and financial services accounted for 54% of deal value in 2014-2015, with industrials and chemicals reporting the greatest share of overall deal volume (20%).
- 2015 saw an increase in deal volume for domestic transactions (56% compared to 49% in 2014). However the bulk of M&A value stemmed from inbound deals (75%), the highest since 2011 (80%).
- Looking ahead, the Mergermarket Heat Chart, which logs ‘companies for sale stories’ for the past 12 months, shows that telecommunications, media and technology (TMT) is generating the highest number of M&A targets (nine), followed by five each for financial services, industrials and chemicals and transportation. “The logistics sector is looking for investment as it is changing strategy with regards to the whole new Russian situation and the Latvian government’s drive to become the regional transit hub,” says Raimonds Slaidins, Partner at Ellex Latvia.
To view the full report, please click here.
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Mergermarket is an independent Mergers and Acquisitions (M&A) intelligence service with an unrivalled network of dedicated M&A journalists based in 62 locations across the Americas, Europe, Asia-Pacific, the Middle-East and Africa. Unlike any other service of its kind, Mergermarket specializes in providing forward-looking origination and deal flow opportunities integrated with a comprehensive deals database – resulting in real revenues for clients. Visit www.mergermarket.com.
Ellex is a circle of pre-eminent law firms from each of the Baltic States. It brings together the region's three strongest and most highly ranked firms from each of the states: Ellex Raidla in Estonia (previously Raidla Lejins & Norcous Estonia), Ellex Klavins in Latvia (previously LAWIN Riga) and Ellex Valiunas in Lithuania (previously LAWIN Vilnius).
With over 160 legal professionals and the widest variety of practice areas, Ellex is ideally positioned to provide each client top expertise and in-depth specialised legal services both domestically (in Estonia, Latvia and Lithuania) and on pan-Baltic dimension.
Ellex provides consultations in all areas of business law. When needed, we represent our clients in local and international litigation, arbitration and administrative hearings. Our professionals in 9 practice areas enable us to manage complex projects ensuring effective and integrated solutions. The practice areas we work in include: Corporate and M&A; Banking & Finance; Commercial & Compliance; IP & IT; Dispute Resolution; Employment; Tax; EU & Competition; Real Estate & Environment.
Please find more details in www.ellexcircle.com