Romania's M&A market is gradually maturing, reveals an analysis by Mazars

8 March 2022

Two years after the start of the COVID-19 pandemic, the M&A market in Romania is constantly growing and is expected to follow the current upward trend, considering that the majority of investors are looking for more ways to develop their projects.

Hard data, a rock-solid business plan, a competitive advantage, a powerful narrative, as well as a business drive, a strategy, and a clear investment structure are all essential criteria for investors that are looking towards Romania, as an attractive market for their future goals.

There were 49 disclosed deals* among Romanian companies in 2021, which means an increase of 17% compared to the previous year. At the same time, the value of transactions also increased by 58% compared to 2020, with deal value reaching €2.7bn. The largest deal was ExxonMobil’s sale of a 50% stake in the offshore XIX Neptun Deep Block concession, located in the Black Sea, to natural gas firm Romgaz. The €914m deal comprised almost half of the year’s total value.

Another significant transaction was the acquisition of a 49.25% stake in Globalworth Real Estate by existing shareholders Aroundtown and CPI Property Group – both Luxembourg-based property firms – for €773.6m.

Romania’s M&A market is becoming more and more mature. Up until now, local entrepreneurs financed mostly from the banks. During the last two-three years they have diversified and are more open to different categories of financing, including equity and strategic investors. Moreover, they have started to be more interested in expanding by acquiring local businesses as well as companies outside Romania.”, mentioned Răzvan Butucaru, Partner, Financial Services & Advisory Leader, Mazars Romania.

The acquisitions announced in 2021 were evenly spread between Romanian investors (24 deals with a €1,076mil disclosed value) and foreign entities (25 deals with a €1,627mil disclosed value). We have also seen Romanian companies that were active outside of the country (3 deals made by Romanian entities, although the value of these deals was not disclosed).

Considering the number of deals made, the most active foreign investors locally were French investors (with 4 deals), German investors (with 3 deals) and UK, Swiss, US and Irish bidders (with 2 deals each) while, according to the deal value, the first places are taken by a Cyprus based entity (€774mil disclosed value, backed by investors from Luxembourg), by Dutch investors (€300mil disclosed value) followed by British investors (€300mil disclosed value). During the last 3 years the top looks similar with 11 French investments and 10 German investments while in terms of deal value the top positions are held by the investors from Australia (with €1,000mil disclosed value), followed by Cypriot investors, with €774mil disclosed value and Dutch investors, with €436mil.

From an industry perspective, last year was a very active one for Energy companies (7 deals), Software companies (7 deals) and Financial services companies (also 5 deals), with the energy sector also benefitting from the largest deal of the year (Neptun Deep Block concession). „While not fully captured in reported database statistics, due to minimum size requirements, we have noticed significant interest of different players in acquiring IT and healthcare companies which have fared great and are well positioned in the post-COVID-19 context.”, mentioned Adrian Mihalcea, Senior Manager, Deal Advisory, Mazars Romania.

*according to the Mergermarket and Mazars Inbound M&A report 2021/2022.