www.business-review.eu Business Review | August May 2016 2020
COVER STORY M&A 15 14
M&A trends in the first half of 2020: What can we learn? While the Romanian mergers and acquisitions (M&A) market saw 19 deals with a cumulative value of EUR 600 million signed in the first three months of the year, the number of transactions halved in the second quarter, when fewer than 10 deals were closed. By Claudiu Vrinceanu ond half of 2020 or for 2021. In the long run, however, the impact remains uncertain,” says Georgiana Ion, senior manager, deal advisory at Mazars Romania. When can the M&A market return to normal? Only 1 in 5 respondents (21 percent) in a study conducted by Mazars said that would happen in Q3 2020, while 14 percent believed the more realistic period would be Q4 2020, and 61 percent were more cautious, opting for 2021. However, the current issues should be seen as opportunities for all parties involved. Despite the current limitations and conditions, the Romanian M&A industry has the potential to evolve in a dynamic market, with opportunities normally encountered in times of recession – such as rapid sales based on illiquidity, merger operations giving up nonessential or non-performing assets, but also a recalibration of the investment portfolio. The 7 out of 10 executives believe that the current moment is right for mergers or acquisitions
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market will continue to expand, as more and more companies understand the added value a strategic investor can bring in terms of new financing and know-how.
lthough the first quarter of 2020
of withdrawing from the Romanian market
was better than the same period of
and that it could freeze the sale of local assets
2019, the mergers and acquisitions
if it did not get the desired price. Second, the
believe that the current moment is right for
market collapsed as a result of the COVID-19
pandemic has reduced Banca Transilvania’s
mergers or acquisitions in specific industries,
pandemic. The start of the year was good for
appetite for acquisitions: its recent aggressive
given that some sectors will provide the op-
the local M&A market, but after the pandemic
expansion will be put on hold for at least two
portunity to invest in quality, properly valued
began, investors became more cautious in the
years, and a possible acquisition in the future
goods, says an analysis by consulting firm AT
uncertain economic context.
will not target small players.
Kearney.
The main short-term effects of the CO-
“After a relatively active start to the year,
In this regard, seven out of ten executives
We can conclude that for companies which
VID-19 pandemic on the M&A market have
Romania was among the countries hit by the
have built a healthy financial position during
been a withdrawal of offers or a postpone-
pandemic and according to the latest EBRD
the economic boom of recent years, declining
ment of transactions, and the long-term
forecasts, its economy is expected to decline
valuations during this period create oppor-
impact remains uncertain. Companies have
by 4 percent this year. The global health crisis
tunities to conduct transactions that create
been cautious about investing in M&A and
has created uncertainty, disruption of supply
long-term value. A good example is the major
are waiting for the situation to begin to
chains, and pressure on liquidity. The short-
transaction in which the TeraPlast group sold
normalise. Let’s look at just two examples.
term effect on the M&A market was limiting
its Steel division, which includes TeraSteel
First, Czech utilities group CEZ announced
or delaying the signing of transactions, many
and Wetterbest, to Irish giant Kingspan, for
that it was not pressed for time in the process
of which were postponed either for the sec-
EUR 85 million.
