FOR IMMEDIATE RELEASE
M&A Activity in Emerging Europe Slowed, Deal Intents Rose in H1 2012, DealWatch Report
August 28, 2012 - ISI Emerging Markets, the leading provider of hard-to-get business information on Emerging Markets, today released "Europe, Middle East and Africa M&A Report H1 2012," a detailed analysis by its M&A service DealWatch. According to the report, the number of deals registered in the Emerging Europe region during the first half of 2012 fell by over 22% versus the same period in 2011, while total deal value tumbled by almost 45%. The number of anticipated deals has nearly doubled, with the majority representing sell-side intents.
The M&A activity in Emerging Europe continued its decline in H1 2012 amid uncertainty over the future of the euro zone. The number of deals totaled 1,631, down by 22.3% from H1 2011. Transactions were smaller on average with the total deal value declining by 44.9%, to nearly EUR 55bn.
The sector breakdown shows that Manufacturing led volume, with a total of 317 deals. Finance and Insurance followed with 187 deals, while Wholesale & Retail Trade saw 172 transactions. In terms of deal value, Finance and Insurance registered EUR 10.6bn (19.3% of the aggregate value), Manufacturing - EUR 9.1bn (16.5%), while Mining ranked third with EUR 7.8bn (14.2%).
Russia was the most active market in the region in H1 2012, with 574 deals that accounted for 56% of the total deal value (over EUR 30.3bn). These figures represent a 32% drop in the number of transactions and a 50% fall in value. The largest transaction in H1 2012 was the acquisition of 18.9% in telecommunications firm MegaFon by its peer AF Telecom, for over EUR 2.3bn.
Turkey saw EUR 8.7bn of M&A investments carried out in H1 2012, which represents a 26% growth. The largest transaction during the period was the EUR 2.8bn takeover of DenizBank by Russia's Sberbank from French-Belgian financial group Dexia. There were 178 deals registered in Turkey in H1 2012, 19% fewer than in the respective period of 2011.
Poland witnessed EUR 5.2bn in M&A deals completed in H1 2012, less than half of the value registered in H1 2011. At the same time the volume of deals dropped by over 24%, to 198. The largest deal by value announced in H1 2012 was the takeover of Kredyt Bank by its Polish peer BZWBK and its Spanish owner Banco Santander, worth around EUR 1bn.
Although the completed M&A activity in the region was largely negative versus the prior year, the number of intended or rumored deals registered in the DealWatch DealMonitor database grew at an unprecedented rate of over 82%, to 940 expressed intents in H1 2012. While in H1 2011 the buy-side to sell-side proportion stood at 244:272 (47% to 53%), a year later it stands at 326:614 (35% to 65%). This signals a greater determination of potential sellers to dispose of their holdings in Emerging Europe, which might forecast generally lower valuations, on the horizon.
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About ISI Emerging Markets
A subsidiary of Euromoney Institutional Investor, ISI Emerging Markets (www.securities.com) delivers electronic information products by subscription to institutional customers around the world. Through its network of offices worldwide, it provides hard-to-get information covering more than 100 emerging markets. Its flagship product is the Emerging Markets Information Service (EMIS).
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