Deals in Central and Eastern Europe More but smaller

The number of mergers and acquisitions (M&A) deals in Central and Eastern Europe (CEE) increased in 2022, but their total value decreased In a year marked by rising inflation, rising energy prices and Russia's war in Ukraine, activity in the region has generally remained stable, and the results achieved are comparable to those of the pre-pandemic 2019, according to data from the joint annual survey of the international legal organization CMS and the analyst company EMIS - The Emerging Europe M&A Report 2022-2023.

According to their observations, the total number of M&A deals concluded for the period in the region was 1,229, compared to 1,164 for 2021 However, their size was more modest - in 2022, only three megadeals worth more than 1 billion were announced in CEE.

euro, while a year earlier there were 15 of the mergers and acquisitions in the region Thus, the total volume of deals for the past 12 months is 32.

93 billion euros, or 20% less than the record 41 31 billion euros reported in 2021.

The deals of 2022: medium-sized, lots of IT and with caution at the end Corporate the world is preparing for fewer deals in 2023 The dynamics in Bulgaria are similar - a higher number of deals, but at a lower total value.

According to the survey, 72 contracts were signed in the country last year compared to 70 a year earlier In total, their value was 1.

43 billion euros, compared to 1 91 billion euros in 2021.

Volumes remain significantly lower than the pre-crisis levels of 2018 and 2019, when deals of more than 2 billion euros were concluded annually (see graphic) The report includes transactions, announced in the period January 1 - December 1, 2022, which are worth at least 1 million euros for the acquisition of a share of at least 2% of the shares of a given company or of individual assets, and in the case of transactions for business properties the threshold is 5 million.

euro Excluded are rumored deals, issues of convertible shares, buybacks, bad debt package deals, internal restructurings, etc.

Preferred sectors Business digitalization continues to be among the main drivers of M&A activity as well An expression of this is the fact that for the third year in a row the most deals were concluded in the "Telecoms and Information Technologies" sector - a total of 336, the authors of the report note.

The "Real estate and construction" sector is second both in number of transactions and in terms of their volume In 2022 it announced 205 M&A transactions with a total value of EUR 7.

82 billion The top three in terms of activity is completed by the "Manufacturing" sector, where a total of 170 transactions were concluded during the year.

In terms of volumes of announced deals, the champion in 2022 is the mining industry with a total of 7 98 billion euros.

Behind the impressive result, however, there is practically only one transaction - the megadeal for the privatization of the leading Polish gas trader PGNiG from the local oil giant (and revenue leader in the region) PKN Orlen, which EMIS analysts estimate at 7 9 billion euros.

In the top three sectors in terms of the total volume of concluded deals is also energy - with 4 03 billion euros.

The largest corporate transfer in Bulgaria for the past year also contributes to this result - that of the konturgloba maritsa-east 3 tpp In it, the second largest coal plant in the country got a new owner after the American group ContourGlobal agreed to sell its business to the fund Kohlberg Kravis Roberts (KKR) for just over 2 billion euros.

Despite the turbulence in the energy markets, activity in the "Energy and Utilities" sector remains stable, largely thanks to investor interest in RES, the authors of the report note After a record performance in last year's edition of The Emerging Europe M&A Report, equity deals have maintained a solid performance, albeit at a more modest pace.

In 2022, equity investments in the region totaled €9 99 billion, compared to €13.

03 billion a year earlier Their total number increases to 289 compared to 280 for 2021.