Deloitte analysis: The M&A market reduced its pace in the beginning of the year

The mergers and acquisitions market in Romania has seen a significant decline in the first quarter of 2019 compared to the same period in 2018. According to Deloitte estimates, the total market value, including the transactions with undisclosed value, has been between EUR 200 and 300 million, while, as stated by public sources, the transactions whose value was announced amounted to EUR 120 million.

“Although the figures suggest an apparent reduction of activity, we believe that in the particular situation of this year’s start, we are rather witnessing an extension of the ongoing processes, which we expect to materialize in the next period. The market is still offering further opportunities for both consultants and for owners interested in selling. We are seeing exit incentives of some business owners who want to capitalize on this window of opportunity and which we believe will end successfully,” said Ioana Filipescu, Partner Corporate Finance, Deloitte Romania.

15 transactions were monitored in the first quarter, of which only two with officially disclosed values. The tendency seen in recent years of not disclosing the value of transactions has increased in the beginning of this year. During the similar period in 2018, 20 deals were completed, out of which seven have had their value publicly announced.

The largest deals announced in the first quarter of 2019 were:

• the acquisition by the investment fund MAS Real Estate of a portfolio with nine commercial centers, in Roman, Baia Mare, Slobozia, Focsani, Ramnicu Sarat, Targu Secuiesc, Fagaras, Gheorgheni and Sebes, (value of EUR 113 million);
• the acquisition of Interbrands Marketing & Distribution, one of the leaders of the distribution sector in Romania, by the Orbico Group, one of the biggest consumer goods distributors in Central and Eastern Europe (deal value undisclosed);
• the merger between eMag’s group subsidiary in Hungary and Extreme Digital from Hungary, resulting in the largest e-commerce company in Central and Eastern Europe;
• the acquisition by USA based Transcendia of Industrial Mecano Import Export (deal value undisclosed);
• the acquisition by Mega Image of Zanfir stores network (deal value undisclosed).

Romanian M&A market, in Q1 2019:

• market value (transactions with disclosed value): EUR 120 million;
•  average value: EUR 60 million;
•  market value (including Deloitte estimates of undisclosed deals): EUR 200-300 million;
•  number of transactions (including undisclosed deals): 15.

*Note: the graph includes deals announced in the relevant period with a disclosed value of over EUR 5 million. Historical numbers are up-to-date with the deal values discerned from the latest available information.

Deloitte Romania coordinates an integrated multidisciplinary M&A practice, with a holistic approach that ranges across multiple service lines, including M&A Advisory, Transaction Services, Fiscal Advisory and Legal Advisory. Deloitte teams of skilled professionals can thus cover all relevant aspects of a transaction.

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Deloitte Romania is one of the leading professional services organizations in the country providing, in cooperation with Reff & Associates, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes and technology services and other related services with more than 1,500 professionals.