Romania should see an increase in M&A activity this year, since the current context could be beneficial for both buyers and sellers, according to KPMG’s M&A Landscape in Romania.

Investors are looking to acquire distressed companies at an attractive price, which could bring them higher returns in the future.

However, many are also ready to pay extra for top tier companies that have outperformed the pandemic and demonstrated a resilient business model, according to KPMG.

Sellers may benefit from the excess liquidity in the financial market and the consolidation trend led by companies with healthy balance sheets.

M&A discussions will mainly focus on the achievability of positive business plans. Some 61% of the respondents to the KPMG survey expect high levels of M&A activity in Romania over the coming months. Technology (IT) will be the most attractive sector for investors, followed by Pharma & Healthcare, FMCG and Energy & Infrastructure.

The survey also reveals some potential inhibiting factors that could affect the success of a transaction. Buyers are mostly worried about substantial differences in price expectations, macroeconomic uncertainty and the lack of suitable targets.

COVID-19 is not perceived as an inhibiting factor and most of the respondents are confident that the pandemic will soon come to an end.

“Even though the pandemic is still ongoing and we are still recovering from the initial panic, we see a lot of optimism in the market and a considerable number of transactions are expected in 2021. During the past few years, the Romanian M&A market has become a favorable environment for buyers,” said Bogdan Vaduva, Partner, Head of Deal Advisory, KPMG in Romania.

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andrei@romania-insider.com