Wealth of Information about Russia’s Merger & Acquisition market Revealed

Wealth of Information about Russia’s Merger & Acquisition market Revealed

Comment: Investment in Russia by UK companies is both desirable and profitable suggests a new report.

A report by CMS Legal reveals the scale and size of the Russian M&A market pointing to a much more vigorous approach by foreign investors.

Despite an overall fall in both the number and value of M&A deals done in 2011 reflecting the European and global slowdown, inbound deal making by foreign companies saw 70 deals made a
collective €21.2bn – a 21% increase in volume and a 116% increase in value from the 55 inbound deals worth €9.8bn registered in 2010.

The third annual CMS Deal Drivers Russia, an extensive review of the Russian M&A market, reveals that Russia saw a total of 214 deals announced in 2011 worth €53.8bn, compared to 223 worth €57bn in 2010.

The largest deals tend to be in the energy, mining, oil and gas sectors, but one of the liveliest hubs of M&A for foreign investors has been the consumer market. Both US and UK acquirers have kept a particularly close watch on this industry, which in recent years has attracted PepsiCo, Walmart and a host of other global conglomerates.

The next year will still present challenges. Compared to 30% last year, 46% of respondents this year believe lenders are pressuring Russian businesses to alter their capital structure. At the same time corruption (29%), bureaucracy (25%) and legislation (22%) are identified as the top obstacles to doing deals in Russia, followed by political risk and a lack of viable targets.

The majority (56%) of aggregate M&A deal value came from the energy sector in 2011, followed by the financial services sector (12%).

Private equity firms in Russia are expected to focus primarily on private companies (42%) or on divestments from larger corporations (32%) in the next 12 months.


Russia is excellent to expand your business into for the following reasons... Vantage International Market research service can help your market entry into Russia as...

Comments are closed.