A different M&A landscape in Romania
Four months ago, when Philippe Lajat stepped in as partner in charge of further developing the M&A practice at Ernst & Young Romania, the merger and acquisition market was at the end of a dynamic cycle that was dominated by vendors. Now, the financial crisis has sent the market into a resting point and conferred the bargaining power to buyers, in a buyer-seller relationship.
“Now we see a different landscape of the Romanian M&A market. We have a changing market, and I expect to see a variety of drivers to fuel the local M&A market, such as force-feeding deals and reorganizations/restructuring, which account for merely one segment of merger and acquisitions that will be concluded in the following months”, Philippe Lajat, M&A Partner Ernst & Young, told Wall-Street in an interview.
Classic strategic deals represent the second support pillar of the merger and acquisition market, as part of the expected consolidation processes in various key-market segments. “The deal market between private companies is not fully locked down, and we, financial advisors, respond promptly and actually have our work cut out in this period“, said Philippe, who has had experienced deals in France and the United States.
According to recent estimations of investment banks with local presence, the local M&A market will shrink by 20-30% in 2009 from last year, when deals concluded in Romania amounted to more than 5 bln euros.
“Currently, we have a pipeline of deals at different stages sized from few million euros to over 100 mln euro mandates. We clearly monitor with our clients what should be the most appropriate tempo, stressing the preparation phase (key to convince) and adapting / tailoring the transaction process to the shareholders’ objectives, the group’s situation and the current market conditions”.
“Now we see a different landscape of the Romanian M&A market. We have a changing market, and I expect to see a variety of drivers to fuel the local M&A market, such as force-feeding deals and reorganizations/restructuring, which account for merely one segment of merger and acquisitions that will be concluded in the following months”, Philippe Lajat, M&A Partner Ernst & Young, told Wall-Street in an interview.
Classic strategic deals represent the second support pillar of the merger and acquisition market, as part of the expected consolidation processes in various key-market segments. “The deal market between private companies is not fully locked down, and we, financial advisors, respond promptly and actually have our work cut out in this period“, said Philippe, who has had experienced deals in France and the United States.
According to recent estimations of investment banks with local presence, the local M&A market will shrink by 20-30% in 2009 from last year, when deals concluded in Romania amounted to more than 5 bln euros.
“Currently, we have a pipeline of deals at different stages sized from few million euros to over 100 mln euro mandates. We clearly monitor with our clients what should be the most appropriate tempo, stressing the preparation phase (key to convince) and adapting / tailoring the transaction process to the shareholders’ objectives, the group’s situation and the current market conditions”.