Local mergers and acquisitions market decreased by 6 percent last year, still at a high level

The 2020 mergers and acquisitions market in Romania decreased by 6 percent compared to 2019, amid the uncertainties of the COVID-19 pandemic, shows a PwC report. However, given the context, the market value remained at a high level of EUR 4.9 billion, compared to EUR 5.2 billion in 2019 and EUR 5 billion in 2018. The highest value of the M&A market was registered in 2007, of EUR 5.8 billion.

“In the last quarter of last year, we saw very intense activity on the M&A market, aligned with Romania’s surprisingly good economic growth, which was the highest in the EU. However, those last quarter transactions couldn’t compensate for the reduction in the spring and summer, so the total transactions value for 2020 saw a decrease from 2019. The signals from the economy are positive, however, and the return to activity seen at the end of 2020 is expected to continue in 2021, as there is money in the market. Both strategic and financial investors have substantial capital resources, financing is cheap due to still very low interest rates and the time is right for companies that want to expand, consolidate or diversify and transform their business by acquiring resources and new technologies”, said Dinu Bumbăcea, Partner and Advisory, PwC Romania.

According to the PwC analysis, last year’s total of 254 transactions, 18 percent over the volume recorded in 2019 (215 transactions). The report also reveals an increase in the “below EUR 5 million” segment, both in terms of number and average value of transactions, fuelled by the number of relevant targets, the increasing availability of investors and their interest in that segment.

As has been the case in recent years, more than 50 percent of the market value was achieved through transactions exceeding EUR 100 million.

“Last year’s star sectors, against the backdrop of the circumstances and changes driven by the pandemic restrictions, were IT&C, industrial products, energy,real estate and health and pharma. Those sectors will remain on investors’ agenda. This year will also be favourable for consolidation by the big players in industries such as energy and construction”, said Dinu Bumbăcea.