DDC0182569 - 1- Emerging Europe M&A Report 2023

Results at a glance

Deal activity kept up a steady pace

Three biggest industries with three megadeals

Private equity involved in 20.9 % of deals

Strong cross-border deal activity

Transaction volumes ended the year slightly down at 1,187 deals against 1,229 in 2022, but above the levels of 2019–2021. Values fell by 1.4% to EUR 32.48bn, down from a post-pandemic peak of EUR 41.3bn in 2021, but higher than in both 2019 and 2020.

Deal activity kept up a steady pace

The three biggest industries by deal value on record included Telecom & IT, Manufacturing and Energy & Utilities, and even with macroeconomic headwinds, six deals worth over EUR 1bn were announced in 2023 within these industries. The EUR 2.7bn acquisition of Slovakia business of U.S. Steel by Nippon Steel Corporation was the largest deal in 2023.

Three largest industries with largest deals

Financial investors were involved in 248 deals, 14.2 % less than in 2022, with an aggregate deal value of over EUR 15bn, up 15.68 % year-on-year. The exit from Slovakia business of U.S. Steel stood out as the biggest transaction, valued at EUR 2.7bn.

Private equity involved in 23.5% of deals

Cross-border deal activity was a strong point, with a marginal decrease from 815 to 746 deals in 2023. However, values increased from EUR 22.7bn to EUR 30.8bn. Domestic deal volumes rose from 414 to 441, while values fell by over 83% to EUR 1.7bn. Among emerging European countries, the largest investor countries were Czechia (EUR 2.1bn), Hungary (EUR 1.8bn), and Poland (EUR 1.1bn). The fourth country that garnered significant interest in investments by value is Ukraine (EUR 552m).

Strong cross-border deal activity

Telecoms & IT now accounts for 22.4% of all deals, cementing its position as the busiest sector another year running.

22.3%

Manufacturing attracted attention with deal value increasing 138.8% and reaching EUR 6.6bn, with 181 transactions.

68.4%

Transportation & Logistics has improved by 161.9%, reaching EUR 1.96bn in 46 transactions.

9.3%

Sectors trends

Renewable power generation value has increased both in value by 80.7% reaching EUR 3.2bn and volume increasing by 44.9%.

259.5%

2017

2020

2015

2019

2013

2023

250

500

750

1,000

1,250

1,500

3,5

M&A activity time trend

Overcoming adversity and significant uncertainty, levels of M&A activity in 2023 demonstrate just how resilient CEE markets have proven to be. Transaction volumes ended the year slightly down at 1,187 deals against 1,229 in 2022, but above the levels of 2019–2021. Values fell by 1.4% to EUR 32.48bn, down from a post-pandemic peak of EUR 41.3bn in 2021, but higher than in both 2019 and 2020. There was also a notable uptick in bigger deals, with seven of the top ten transactions valued at more than EUR 1bn, compared to only three deals reaching that threshold in the previous year.

2021

2019

2022

2021

Value (EUR bn)

Volume

32.48

140

6.36

EUR 62,83bn

EUR 53,50bn

EUR 86,65bn

EUR 71,53bn

EUR 80,46bn

EUR 72,34bn

EUR 60,80bn

EUR 94,27bn

Deal value (EUR bn)

Deals (In thousands)

2,596

2,558

2,197

2,138

1,985

2,113

2,093

1,958

1,705

2,015

Country M&A deal volumes

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Transaction trends: M&A activity remains robust despite mounting pressures

Background stories and analysis

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Ukraine counts cost of war but starts to look to future

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Dealmakers are open for business despite macro, geopolitical headwinds

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Emerging Europe’s digital revolution powers on

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Temporary energy short circuit can’t halt shift to sustainable power

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Start-up unicorns no longer mythical beasts

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W&I insurance is fast becoming an important tool in M&A

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ESG: once a “nice to have”; now essential

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Strong founders and innovative companies make for a digital hot spot, say Arma Partners

M&A activity slowed compared to 2021, but it was still at pre-pandemic levels, confirming the attractiveness of the market even in hard times. M&A players have shown that they can easily adapt to new circumstances, and although they might show greater caution in pursuit of targets, deal levels are robust. Even though the current economic and geopolitical situation causes uncertainty and volatility, jurisdictions across the region are well placed to confront the challenges.

Radivoje Petrikić, Partner, CMS (Vienna/Belgrade)

Deal levels have been picking up; we have seen some big transactions in Romania with two multi-billion euro deals happening in the same year. The CEE region boasts some good economic fundamentals that won’t change because of short term difficulties: a skilled labour force, proximity to Western Europe, low transport and labour costs, and increasingly developed infrastructure.

Horea Popescu, Partner, CMS (Bucharest)

Poland

M&A professionals have shown they are capable of adapting to whatever challenges 2022 might throw at them. Although uncertainty about the impact of new variants and the prospect of economic fallout from higher inflation has led to a more cautious end to the year, our findings show that deal-maker confidence has largely been restored. In 2021, the main drivers of deals were long-term underlying trends, such as digitalisation, and with the pace of change and shift to digital continuing to accelerate, the fundamentals for an active dealmaking market remain firmly in place.

Radivoje Petrikić, Partner, CMS (Vienna/Belgrade)

The most active M&A markets in the region by deal volume.

Romania

Czechia

Ukraine

Croatia

Bulgaria

Deals

Discover

Transaction Trends

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Venture Capital

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15 years Renewable Energy in CEE

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Initial Public Offerings

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Public Takeovers in SEE

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Private Equity

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Luxembourg Fund Structures

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Data Centres

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Transformation of the Telco Sector

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Investments from United Arab Emirates

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Al Dahra investing in agriculture

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Israeli Outbound Investment

Background stories and analysis

No. of deals

32.14

10.02

22.89

3.49

41.31

5.24

32.93

5.43

1,187

1,155

995

1,164

1,229

Deals

Poland

Deals

Romania

Deals

Czech Republic

Deals

Ukraine

Deals

Croatia

Deals

Bulgaria

The most active M&A markets in the region by deal volume.

Country M&A deal volumes

Radivoje Petrikić, Partner, CMS (Vienna/Belgrade)

activity slowed compared to 2021, but it was still at pre-pandemic levels, confirming the attractiveness of the market even in hard times. M&A players have shown that they can easily adapt to new circumstances, and although they might show greater caution in pursuit of targets, deal levels are robust. Even though the current economic and geopolitical situation causes uncertainty and volatility, jurisdictions across the region are well placed to confront the challenges.

Telecoms & IT now account for 27.3% of all deals, cementing its position as busiest sector.

Mining attracted attention with deal value increasing 528.9% and reaching EUR 7.9bn, with only 10 transactions.

Real Estate & Construction M&A activity has improved in deal numbers by 16.7%, reaching 205 transactions with total value of EUR 7.82bn

Energy and Utilities increased transaction value by 55.4%, becoming the third biggest sector by value (EUR 4.03bn)

Sectors trends

Deal value (EUR bn)

Deals (In thousands)

2018

2019

2020

2021

2022

250

500

750

1,000

1,250

1,500

3,5

38.70

9.62

Volume

Value (EUR bn)

Merger and acquisition (M&A) activity in the region kept up a steady pace in 2022, with 1,229 transactions, up 5.6% from 2021. Deal value, however, fell short of reaching 2021’s records, coming in at EUR 32.9bn, and plummeting 20.3% on the year.

M&A activity time trend

Deal activity kept up a steady pace

Three biggest industries with three megadeals

Private equity involved in 20.9 % of deals

Strong cross-border deal activity

Results at a glance

Merger and acquisition (M&A) activity in the region kept a steady pace in 2022, with 1,229 transactions, up 5.6% from 2021. Deal value, however, fell short of reaching 2021’s records, coming in at EUR 32.9bn, and plummeting 20.3% on the year.

Deal activity kept up a steady pace

The three biggest industries by value of deals on record included Mining, Real Estate & Construction, and Energy & Utilities, and even with macroeconomic headwinds, there were three deals worth over EUR 1bn announced in 2022. The EUR 8bn merger between Poland’s PKN Orlen and PGNiG was the largest deal in 2022.

Three biggest industries with three megadeals

Financial investors were involved in 289 deals, 5.4% more than in 2021, with an aggregate deal value of almost EUR 10bn, down 23.4% year-on-year. The sale of Polish electricity PKP Energetyka by Luxembourg-based CVC Capital Partners to state-controlled utility PGE stood out as the biggest transaction, valued at EUR 1.3bn.

Private equity involved in 23.5% of deals

Cross-border deal activity was a strongpoint, up from 743 to 815 deals, although values fell from EUR 38.2bn to EUR 22.7bn. Domestic deal volumes slipped marginally from 421 to 414, while values more than trebled to 10.3bn. Among emerging European countries, the largest investor countries were Poland (EUR 10.3bn), Czechia (EUR 3.1bn), Hungary (EUR 1bn), and Romania (EUR 753m).

Strong cross-border deal activity