Russian M&A Market in 2009 Dropped Almost by 60% - FBK Review
OREANDA-NEWS. May 20, 2010. M&A market last year was about 41, 91 billion USD against 98 billion USD in 2008. I.e. decrease of the volume of transactions was 57,2%, rebounding the market 5 years backward. This is the main conclusion of the annual review “Russian M&A Market in 2009”, prepared by FBK, reported the press-centre of FBK.
According to Stanislav Anikanov, Director of FBK Valuation Department, upon the results of analysis of data on transactions from January 1 to December 31, 2009, provided in open sources, there are two issues catching attention: “First of all, Russian M&A market is becoming less and less transparent, Stanislav Anikanov notes. From 731 transactions, value was disclosed in 32,15% cases comparing to 54% in 2008. A lot of minor and medium transactions are committed non-publicly, what becomes a public domain is data, providing information only on the top of iceberg”. Secondly, the expert notes that transactions of purchase of Russian assets by foreign capital decreased most dramatically: “Comparing to 2008 total cost of trans-border transactions, while foreign investments in shares of Russian companies decreased more than 5 times”.
As noted in FBK research, in crisis conditions “decline of activity at M&A market was unavoidable, as companies, first of all, aimed at cost optimization, however, vacuum, which appeared because part of companies had left the market was filled with stronger players”. First of all – the ones of oil and gas sector (21,22 billion USD, which comprises about 50,63% of market volume). Comparing to 2008, volume of transactions in this sector picked up by 75,84%. Telecommunications sector follows oil and gas field ( 4,97 billion USD, 11, 88% of the market volume), as well as entities of the sector “construction, real estate and hotel business” (3, 87 billion USD, 9, 24% of the market volume).
On the whole, throughout last year for transactions over 1 billion USD worth over a half (51%) of the total volume of M&A market accrued. At the same time, average transaction value, as FBK experts noted, declined from 235 billion USD to 226 billion USD.
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