Business Forum • 4 April, 2024 at 9:36 AM
During the first three months of 2024, the Romanian mergers and acquisitions (M&A) market recorded 63 transactions, a modest uptick from the 61 deals recorded in Q1 2023, indicating an acceleration of activity from the previous two quarters.
The estimated value of local M&A activity totaled $1.1bn2 in Q1 2024, down from $2.5bn in Q1 2023. However, the estimated value of local M&A activity only decreased by 7% on a yearly basis when accounting for Q1 2023's mega-deal, namely the acquisition of Italy-based Enel Group's operations in Romania by Public Power Corporation for $1.3bn.
The largest deal of the first quarter was the acquisition of Hungary-based OTP Bank's operations in Romania by Banca Transilvania, the country's largest bank, for a consideration of $375m. Another significant deal during this timeframe saw CTP, Europe's largest publicly listed developer of industrial and logistics properties, purchasing 5 light-industrial parks from Globalworth Real Estate Investments' wholly-owned logistics portfolio, for approximately $184m.
Furthermore, Romania's largest power producer Hidroelectrica completed the acquisition of UCM Resita's selected business lines in Q1 2024, having signed the transaction in Q4 2023. EY's multidisciplinary teams provided M&A advice, financial and tax support as well as valuation and business modelling services to the buyer.
Strategic investors remained the dominant players, accounting for 92% of transactions in this timeframe. Inbound transactions surged by 21% in Q1 2024 when compared to the same period last year, counting 29 transactions, while domestic players reduced their activity by 15% to 28 transactions (compared to 33 in Q1 2023). Regarding the country of origin for investment, the United States emerged as the most active investor with 6 deals, followed by Austria with 4, and both Germany and the Netherlands, each recording 3 transactions.
The Consumer Products & Retail sector led in activity volume in the first quarter with 14 deals, followed closely by Real Estate, Hospitality & Construction with 13 deals, and Health with 8 deals. Technology and Power & Utilities sectors followed with 5 transactions each.
EY's M&A database for Romania excludes transactions with stakes acquired of less than 15% (2) includes an estimate of the value of transactions where no data was formerly disclosed by the parties or is not available in third party databases and/or reported by media sources, and (3) multi-country transactions which include companies or operations in Romania are included in the number of transactions but excluded from the value of M&A where the allocation of transaction value is not available.