News

Czech M&A market showing strong signs of recovery

CMS, AIG and EMIS publish their “Emerging Europe: M&A Report 2014/15”

• Czech Republic is the strongest performer in Central Europe
• Highest number of signed M&A deals in the Czech Republic since 2010
• Overall deal value in the Czech Republic exceeding the Polish market

The Czech M&A market is showing strong signs of recovery. Based on the latest Emerging Europe: M&A Report published by law firm CMS and insurance company AIG in cooperation with deal monitor EMIS the Czech market is at its most active point since 2010 and in the last 12 months has outperformed its neighbouring CEE markets. Although the market lacked the deals in excess of €1 billion which characterised 2013, a total of 171 M&A transactions got signed in 2014. Moreover, the overall deal value, which topped €5 billion, is a telling sign of returning market activity.

Hungary and Slovakia have also witnessed an increase in deal flow, however, their deal volumes lag far behind that of the Czech Republic. Poland remains a larger market in terms of deal volume, but is for the first time overshadowed by the Czech Republic in terms of overall deal value.

Helen Rodwell, Managing Partner of CMS Prague adds:
“Last year’s cautious optimism regarding the recovery of the Czech M&A market was, it seems, justified. There are signs of market recovery across the region. There is an increasing interest from global private equity players both in midsize – and often family or founder owned – businesses across the region as well as in larger assets that are coming on the market due to privatization programmes or secondary sales, including various infrastructure assets. Although the levels of activity still strongly vary – with countries such as the Czech Republic and Slovakia showing record deal volumes – on a whole we are upbeat about the year to come.”

Contrary to the Czech Republic, the region as a whole recorded a 14% annual decline of announced deals with a value above €1 million and recorded to a total of 2,198 signed transactions. Merger and acquisition activity in Emerging Europe in 2014 saw a whopping 43% drop in deal values, falling from €112 billion in 2013 to €64 billion in 2014.

Radivoje Petrikić, CEE Corporate Partner adds:
‘CMS remains optimistic about deal flow in CEE in 2015. Deals that are currently in the pipeline, as well as new deals resulting from numerous restructuring projects in the region, are sure to keep us busy in the coming year.'

Boris Maleshkov, Head of Editorial, EMIS adds:
‘Tensions between Moscow and Kiev as well as renewed speculation of Greece’s potential exit from the Eurozone will be a drag on regional M&A activity in 2015. However, we believe that large transactions in Poland, especially in the energy and banking sectors, and the ambitious privatisation programmes launched by the governments in Turkey and Romania, will bring some relief to regional market players.’

Angus Marshall, AIG, comments:
‘We are observing that W&I insurance is becoming an increasingly regular feature of the M&A landscape in the region and noted a record number of policies being issued in 2014, especially for property transactions. We anticipate demand for W&I insurance on property transactions to remain strong in 2015, and regional interest in W&I insurance for non-property M&A transactions to expand significantly, with Poland leading the way.’

The most active sector by deal numbers in 2014 was manufacturing, with 364 deals representing 17% of all transactions. Mining (including oil & gas) was the leading sector in terms of deal value, at over €10 billion, accounting for nearly 17% of the overall market.

M&A in Russia accounted for 33% of all deals in Emerging Europe and 47% of the total deal value in 2014. Poland came second with a 13% share in deal numbers, closely followed by Turkey with 12%.

Private equity funds – known for their appetite for higher risk – had a relatively good year in the region as the number of PE-related deals rose by 6% to 248.

Full version of the report can be found at http://www.cmslegal.com/New-CMS-AIG-and-EMIS-DealWatch-report-shows-slower-MA-deal-flow-in-2014-20-01-2015



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CMS
Founded in 1999, CMS is a full-service top 10 international law firm, based on the number of lawyers (Am Law 2013 Global 100). With 59 offices in 33 countries across the world, employing over 3,000 lawyers, CMS has longstanding expertise both at advising in its local jurisdictions and across borders. CMS acts for a large number of Fortune 500 companies and the FT European 500 and for the majority of the DAX 30. Revenues totalled €842m in 2013.

CMS provides a wide range of expertise across 18 expert practice and sector areas including Corporate, Energy, Funds, Lifesciences/Pharmaceuticals, TMT, Tax, Banking and Finance, Commercial, Competition, Dispute Resolution, Employment, Intellectual Property and Real Estate & Construction.

For more information, please visit www.cmslegal.com.

CMS offices and associated offices: Aberdeen, Algiers, Amsterdam, Antwerp, Barcelona, Beijing, Belgrade, Berlin, Bratislava, Bristol, Brussels, Bucharest, Budapest, Casablanca, Cologne, Dubai, Duesseldorf, Edinburgh, Frankfurt, Geneva, Glasgow, Hamburg, Istanbul, Kyiv, Leipzig, Lisbon, Ljubljana, London, Luxembourg, Lyon, Madrid, Mexico City, Milan, Montenegro, Moscow, Munich, Muscat, Paris, Prague, Rio de Janeiro, Rome, Sarajevo, Seville, Shanghai, Sofia, Strasbourg, Stuttgart, Tirana, Utrecht, Vienna, Warsaw, Zagreb and Zurich.

EMIS
Founded in 1994, EMIS (formerly known as ISI Emerging Markets) was acquired by Euromoney Institutional Investor PLC in 1999. EMIS delivers electronic information products, by subscription, to institutional customers through its global network of offices. EMIS provides hard-to-get information covering more than 100 emerging markets. Its flagship products are EMIS Intelligence and EMIS Professional.

For over two decades, customers across the globe have relied on EMIS to target, analyse and act on information about emerging markets. We gather deep, rich company and industry intelligence, hard-to-get information, research and analytical data, peer comparisons and more to help you and your clients make well-informed decisions. We are your one central point of contact to deliver the news and content that you need. Personalisation is the hallmark of our services, so you receive just the kind and amount of information you want to see, in a single country, or a group of countries.

For more information, please visit www.emis.com

AIG
American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.