Romanian M&A market to count 100 deals in 2019, NPL transactions to further decrease, says Deloitte

The 2019 M&A market will count around 100 deals, keeping a similar trend with the 2008-2018 period, according to Deloitte Romania Financial Advisory estimations. Also, the average transactions value for 2019 is estimated by Deloitte Romania between 40 and 50 million Euro, slightly above the 40 million Euro average in the past decade.

“Despite the harsh fiscal context at the beginning of 2019, we do not anticipate major consequences on the M&A market in the first half of the year, but rather towards year-end, when the window of opportunity may close, depending on the macroeconomic context. We expect the most dynamic sectors of the M&A market in 2019 to be technology, retail, healthcare, consumer goods and real estate,” said Ioana Filipescu, Corporate Finance Partner, Deloitte Romania.

The 2018 Romanian M&A market, estimated by Deloitte Romania between 3.8 and 4.3 billion Euro, including deals with undisclosed value, was less transparent than in the previous years, with a significant decrease in the number of deals with disclosed values. Considering the disclosed values, the market continued to be dominated in 2018 by strategic investors, which were involved in 56% of the transactions, while the private equity funds were at 39% of the disclosed volume.

The Romanian banks sold non-performing loans (NPL) portfolios with a face value of 1 billion Euro in 2018, according to Deloitte Romania estimations, significantly down from 2.1 billion Euro, in 2017.

“The significant decline of NPL transactions in 2018 is the result of a decreasing non-performing loans stock and of the legislative changes. We expect the NPL transactions to further decrease in 2019, considering the present context, even though banks still have an on-balance sheet stock of non-performing loans estimated at 3-4 billion Euro, as well as a similar volume off balance sheet,” said Radu Dumitrescu, Partner Transaction Support, Deloitte Romania.