KYIV. Feb 23 (Interfax-Ukraine) – The number of merger and acquisition (M&A) deals in Ukraine in 2015 grew by 26.1%, to 140, while their total volume fell by 39.4%, to EUR 504.9 million, according to a report of CMS law firm.
The largest deals of the previous year were the acquisition of Odesa’s Looksery startup by Snapchat mobile application for EUR 132.7 million, the acquisition of 100% in Astelit by Turkey’s Turkcell Group for EUR 89.3 million, the acquisition of 29% of shares in private joint-stock company Inter TV by Dmytro Firtash and Serhiy Liovochkin for EUR 88.52 million, the acquisition of 100% of the Arena Entertainment complex for EUR 36.71 million by an unknown Cyrpus-based structure, the acquisition of a minority stake in Rozetka.ua online retailer by Horizon Capital for EUR 36.41 million, the acquisition of 70% of shares in KUB-Gas from Serinus Energy by Burisma Holdings for EUR 27.5 million, the acquisition of a part of assets of Creative Group by Artur Hranets and Rysbek Toktomushev for EUR 27.31 million, the acquisition of 9.3% of shares in public joint-stock company Motor Sich by an unknown investor for EUR 25.43 million, the acquisition of a minority stake in Ukraine Department Store by Irish Bank Resolution Corporation Limited (IBRC, Dublin) for EUR 10.03 million and the acquisition of 10% in private joint-stock company Zernoproduct MHP (Myronivka, Kyiv region) by Mironivsky Hliboproduct (MHP) for EUR 8.13 million.
The experts said that 2015 did not bring radical changes to the M&A market in Ukraine, as we had predicted. Whilst 2015 saw an increase in the number of M&A deals, the overall deal value dropped significantly, continuing the trend from 2014.
The experts said that in 2013 the number of M&A deals in Ukraine was 249, and their total value was EUR 4.768 billion and in 2012- 342 worth EUR 2.245 billion.
“Given the continuing political unrest, we do not expect a boost in the M&A market in Ukraine in 2016. At worst, we see 2016 being much the same as 2015, with a few strategic exits and a number of high profile deals carried out by Ukraine’s elite. The most attractive sectors in 2016 will continue to be financial services, agriculture and telecoms & IT,” the firm said.
Despite all the challenges, the investment appetite for Ukraine remains strong, and it is anticipated that the government’s continued efforts to improve the investment climate, including reforms in the agriculture, energy and banking sectors and anti-corruption measures implemented in 2015 will have a positive impact on the M&A market, starting as early as 2016.
The optimistic expectations in relation to Ukraine’s 2015 privatisation programme were not met, as the government failed to prepare the legal framework and privatisation targets for a transparent and competitive sale process, the experts said.
