BrazilRomania's deal market remains resilient in face of Covid-19
Dealmaking activity in Romania saw a dip in the face of Covid-19, although Deloitte highlights that the $200 million drop in disclosed value is a relatively small hit considering the circumstances.
Disclosed deal value in Romania ended 2020 at €1.5 billion, a slide from €1.7 billion last year according to analysis by Deloitte Romania. For mergers & acquisitions (M&A) where the sum wasn’t officially disclosed, the year ended at an estimated €4 billion (range between €3.7 billion and €4.3 billion), compared to €4.2 billion in the year previous.
Transaction volume also fell, from 110 recorded deals in 2019 to 91 in 2020. No doubt, Covid-19 and its myriad economic repercussions are key drivers of the broad-based decline. That being said, Deloitte Romania’s partner-in-charge of Financial Advisory Radu Dumitrescu has stressed that things could have been a lot worse.
“2020 marked a decrease in the number of transactions compared to the previous year, but given the unprecedented general context marked by the Covid-19 pandemic, we can say that these results are good,” said Dumitrescu.
The most active sectors considering the number of transactions were real estate (including construction), energy and the financial sector. Together, they generated 50 transactions. From the deal value point of view, the most active sector was real estate, followed by technology and energy.
The outlook
Most promising is that businesses are showing signs of recovery moving into the new year. ”There are signals that market players' interest for transactions, both on the buying and selling side, will continue in 2021.” Considerable interest persisted on both sides even through 2020, which saw some mega deals completed in Romania.
The top transaction per Deloitte’s analysis is New-York-based infrastructure company Macquarie’s acquisition of the Romania-based energy assets of Czech energy group CEZ. Deloitte put this transaction atop the value list despite the sum being undisclosed.
Second on the list is Czech real estate firm CPI Property Group’s minority stake acquisition in Globalworth – the largest holder of commercial real estate in Romania and Poland. Third – in keeping with the steady tick in telecom M&A – Orange Romania took a 54% stake in fixed-line operator Telekom Romania Communications for nearly €270 million.
Similar deals are expected to unfold in 2021 as well, as the economy regains much-needed momentum. At the same time, Deloitte’s leader for Corporate Finance in Romania Iulia Bratu warns against complacency that the Covid-19 storm has blown over. “Given the uncertainties that govern the entire economic spectrum amid the continuing pandemic, we remain cautious.”
