PwC estimates Romania’s M&A market at EUR 4.9 bln in 2020

Romania's mergers and acquisitions market decreased by 6% in 2020 compared to 2019, amid the uncertainties of the COVID-19 pandemic, shows the PwC M&A Outlook report produced by PwC Romania and its partner law firm D&B David si Baias.

However, the market value remained at a high level of EUR 4.9 billion, compared to EUR 5.2 billion in 2019 and EUR 5 billion in 2018. The highest value of the M&A market in Romania was registered in 2007 - EUR 5.8 billion.

"In the last quarter of last year, we saw very intense activity on the M&A market, aligned with Romania's surprisingly good economic growth, which was the highest in the EU. However, those last quarter transactions couldn't compensate for the lower activity in the spring and summer, so the total transactions value for 2020 saw a decrease from 2019," said Dinu Bumbacea, Partner and Advisory, PwC Romania.

"However, the signals from the economy are positive. The return to activity seen at the end of 2020 should continue in 2021, as there is money in the market. Both strategic and financial investors have substantial capital resources, financing is cheap due to still very low interest rates, and the time is right for companies that want to expand, consolidate or diversify and transform their business by acquiring resources and new technologies," he added.

According to the PwC analysis, there were 254 transactions last year, 18% more than in 2019 (215 transactions).

The report also reveals an increase in the "below EUR 5 million" segment, both in terms of number and average transaction value, fueled by the number of relevant targets, the increasing availability of investors and their interest in that segment. However, more than 50% of the market value came from transactions exceeding EUR 100 mln.

"Last year's star sectors were IT&C, industrial products, energy, real estate, and health and pharma. Those sectors will remain on the investors' agenda. This year will also be favorable for consolidation by the big players in industries such as energy and construction," said Dinu Bumbacea.

(Photo source: Dreamstime.com)