M&A deal flow picks up in 2021, tech and renewables in focus

By Julian Gikov, George Mucibabici Jr., Helena Simicevic and
Simona Ciubotariu | Mergers & Acquisitions, Raiffeisen Bank International AG

Julian Gikov Raiffeisen BankMergers and acquisitions (M&A) activity in SEE slowed further down in 2020 before a robust recovery so far in 2021 with total transactions amounting to 5.4 billion euro versus 6.6 billion euro for the entire previous year. Both deals flow and timing were affected by the COVID-19 pandemic. Investment decision-making and deal processing postponed in 2020 are becoming a fact in 2021. The M&A market rebound is most visible in Bulgaria, Slovenia and Croatia. Romania, usually the highest contributor, is catching up at a slower pace. In the past 20 months the regional leaders are the traditional ones – Romania and Bulgaria, with Slovenia coming on board as a high performer. While M&A activity in most SEE countries was influenced by the COVID-19 pandemic, the global economic investment sentiment, as well as excessive funding availability, it was local specifics rather than common features which tended to determine the main drivers of M&A in each country. The post-COVID-19 improvement in climate is evidenced by the annual GDP growth in the second quarter varying from 10 to 15% and consumption growth broadly in the upper 10%. As a result of improved macro environment, a number of high-profile deals were closed in the technology, media and telecom (TMT), energy, finance, infrastructure and real estate sectors. The massive greenfield renewable energy sources (RES) developments pipeline in most countries leads to an increased number of deals for ready-to-build projects in the shorter term, to be followed by larger scale exits by the developers from already operational RES assets in a longer term. The wide availability of sustainable financing and new attractive funding products such as green bonds will further accelerate investment and M&A activity involving targets across all sectors with energy, real estate and manufacturing in the lead. Multinational and regional players’ strategic decisions will continue to drive M&A deals in SEE, backed by solid cash positions focused on national sector champions or high value-added niche product companies. In addition, with above 15 billion euro allocated for investments in Central and Eastern Europe (CEE) by private equity firms, the region is expected to further benefit from the fundraising ease in the recent years.


Mostly impacted by COVID-19, the M&A activity in Bulgaria drew a steep U-curve trend over the past 20 months with a healthy recovery in 2021 well under way in both volume and value terms. After registering record-high levels in 2019, transactional activity in 2020 suffered from delayed investment decisions and extended deal process periods due to the initial pandemics-related uncertainty and a temporary focus on sustainability rather than on expansion or exits. The average deal value in 2020 was down to around 50 million euro with the top three deals representing about 50% of the total. Nevertheless, in line with the entire CEE region, no correction on valuation levels was observed over the review period.

The robust recovery of the market – with deals worth 1.6 million euro in the first half of 2021, almost double the full-year value for 2020 – is the result of the conclusion of postponed deals launched in previous years and returning investor optimism backed by the overall economic recovery.

While the ongoing political uncertainty relating to the unsuccessful formation of a new government does not seem to have adversely affected investment activity, in broader terms the M&A market forecast for 2022 will take into consideration the outcome of the early parliamentary and presidential elections.

Over the past 20 months RES, conventional energy and TMT sectors have been among the traditionally strongest deal generators with infrastructure, software development, tech and ecommerce, agriculture and FMCG also substantially contributing to the deal flow.

Some of the largest deals on the Bulgarian market in 2020 and the first eight months of 2021 were the Sofia Airport concession contract with French infrastructure fund Meridiam, Strabag and Munich Airport, the long-processed sale of CEZ electricity distribution and supply assets to Eurohold, and the sale of the 60.4MW operational Karadzhalovo PV Plant by Blackrock and ACWA Power to Enery Development.

The software and tech space continued to attract interest from abroad, manifested in t he merger between Silverfleet-owned EC4U and Bulpros and the acquisition of SMS Bump by U.S.-based Yotpo, alongside other acquisitions triggered by the growing scale of companies in the sector.

Market consolidation and vertical integration trends generated more than a dozen signed or closed deals in the media and telecom sector, including Nova TV’s sale to Vivacom, Telenor spin-off Cetin’s acquisition of the optic network infrastructure Sofia Communications together with the related internet service provider Raccom, Vivacom’s acquisitions of major regional independent telecom operators such as Net 1, N3, Networks and others.
The largest Pay-TV and internet service provider Bulsatcom is also expected to change its ownership with BlackRock, Blantyre, EBRD and BDB exiting following a successful restructuring and transformation of the company.

The sale of Enhol’s 60 MW operational wind park to Swiss-based MET is the largest wind RES transaction in the country to-date, in line with a continuous uptrend underlining the regulatory predictability and attractiveness of the sector. Furthermore, in the RES sector, which was predominantly focused on operational subsidised assets in the recent years, is expected to be further driven by the massive greenfield projects pipeline currently developed by a balanced mix of international and local investors. In line with the global trends and supported by the Green Deal and increasing ESG requirements, RES development is further accelerated by the favourable regulatory environment sustained over the past seven or eight years.

Private equity activity has been driving the main deals in the FMCG sector – CVC’s acquisition of the largest dairy products player OMK via Vivartia represents a typical for the market scale PE investment in a sector champion. In agriculture, Bunge exited Bulgaria as a result of a revision of its strategy for the region.

Real estate too remained active in the past 20 months, with a number of large deals across all segments.


Romania’s economy coped well with the Covid-19 pandemic and is now at an advanced stage of the recovery process. In 2020, Romania recorded a 3.9% annual decrease in GDP, below the average 6.5% decrease of the EU27 and one of the lowest contractions among the EU27 countries. The low weight of services reduced the impact of Covid-19 pandemic on the country’s economic contraction. GDP data for the second quarter of 2021 showed 13% annual growth, with the services as the main growth driver. Latest estimates point to a 7% increase in GDP in 2021. Romania’s M&A market dynamics remained robust in 2020 with estimates placing total deal value at around 3.5 billion euro and the number of announced transactions at more than 130. Some of the sectors that warmed up in terms of M&A in 2020 were technology, energy, telecom, financial services and real estate.

The list of transactions that made headlines in 2020 included the much anticipated sale of several energy production and distribution assets by CEZ to Macquire Infrastructure and Real Assets in a deal exceeding 1 billion euro, making it the fourth largest transaction on the Romanian M&A market in the past three decades.

Another transaction that was announced towards the end of 2020 was the acquisition by Orange Romania of a 54% stake in Telekom Romania Communications from OTE for around 270 million euro.

The top deals for 2020 included the sale of Wirecard Romania, a leading payment processing services provider, to SIBS Portugal as part of the divestiture process of the insolvent Wirecard Group, and the sale of the steel division of TeraPlast, the largest Romanian construction materials manufacturer, to Kingspan Group.

The list of major transactions concluded in the real estate sector included the acquisition of NEPI-Rockcastle’s portfolio by AFi Europe consisting of several office buildings in Bucharest and Timisoara, for an estimated consideration of 300 million euro, and the acquisition of a minority stake in Globalworth Real Estate by CPI Property Group.

Private equity-driven activity continued, as a notable deal was Innova Capital’s acquisition of consumer payments operations of PayPoint.

M&A activity has picked up since the beginning of 2021 and is estimated at above 1.3 billion euro.

Decarbonisation is a strategic EU goal which Romania too has embraced, as renewables are instrumental to achieving the targets set by the EU for the 2021-2023 period. Thus, the energy sector, RES in particular, is likely to remain in the spotlight by the end of the year. The sector saw several notable transactions such as Hidroelectrica’s acquisition of the 108 MW Crucea Wind Farm, Electrica’s deal for solar and wind parks with 200 MW total installed capacity, the Alternus Energy acquisition of a 20 MW solar park, and Ecoenergy’s acquisition of a 153 MW solar park under development from Portland Trust.

Other major developments include the acquisition of betting and gaming company MaxBet by Novalpina Capital and the acquisition by A&M Capital Europe of Pet Network from Rohatyn Group. Banca Transilvania continued its consolidation strategy by acquiring Idea Bank from Getin Holding.

Another noteworthy deal was the acquisition by mobile gaming company Miniclip of a majority stake in its peer Green Horse Games.


The Croatian M&A market remained active in 2020 with 15 deals closed. A further 14 were recorded in 2021. Deal value disclosed was 814 million euro.

The IT sector saw the highest activity. The largest transactions were acquisition of Nanobit, a developer of mobile games, by Stillfront Group for 100 million dollars,and One Equity Partners’ 200 million euro investment in Infobip, implying a valuation of more than 1 billion dollars. Infobip has already commenced a series of strategic acquisitions by buying US-based OpenMarket for 300 million dollars. Further transactions in this sector included Smartrent’s buy of Tri plus grupa, a developer of security system and house management software, Playrix Croatia’s deal for Cateia Games, a mobile and PC video game developer, and Devolver Digital’s acquisition of Croteam, a video game developer,while Microblink raised 60 million dollars in a round led by Silversmith Capital Partners. This trend continued into 2021 when Vela Software International acquired SVAM Plus, a provider of software solutions, and Emma Capital bought Bazzar, an e-commerce marketplace.

The largest transaction in Croatia was part of the Turkey’s Dogus Group restructuring. CVC Capital Partners acquired D Marinas’ operations in Greece, Croatia and the UAE for an approximate consideration of 365 million euro, and an Erste fund acquired a 90% stake in Villa Dubrovnik, a luxury hotel in Dubrovnik, also from Dogus Group.

Additional M&A activity involving smaller assets was observed in the renewables sector as KELAG acquired wind farm Orjak with a capacity of 10.25 MW and EARL Infrastructure Capital bought Energy 9, a wood biomass power plant with electrical and heat capacity of 5 MW and 19.4 MW respectively. PEARL Infrastructure Capital acquired UNI VIRIDAS, a biomass cogeneration plant with a production
capacity of 8.6 MW electrical and 16 MW thermal. The energy sector shows further consolidation trends as HEP-Plin agreed to acquire PPD gas distribution for 10 million euro.

In 2020 the Fortenova Group continued to stabilise its business and liquidity through the sale of some non-core businesses and non-operating assets. It completed its exit from tourism through the sale of tour operator Kompas to Springwater Capital, and Karisma Hotels Adriatic to TUI. The restructuring of Agrokor continued in 2021 with the successful completion of the disposal of the group’s frozen food business, including the regional leaders Frikom and Ledo for an aggregate consideration of approximately 15 million euro to Nomad Foods. Fortenova will remain a major M&A player in Croatia and the region with further disposals of non-core assets.


Despite the lingering effects of COVID-19, the M&A market in Slovenia remained very active. After an initial freeze in 2020 when most transactions were temporarily put on hold, confidence in the economy picked up and M&A activity recovered.
The Slovenian market was strongly driven by private M&A transactions. The top deal in 2021 was the sale of medical equipment manufacturer Fotona to Vitruvian Partners, a UK-based private equity firm, for 700 million euro. In 2020, Sartorius acquired BIA Separations, a manufacturer of products for purification and analysis of large biomolecules, for a consideration of 360 million euro.

Other major transactions included Orange Climate’s acquisition of LINDAB, an air handling units producer, from Lindab; Heta’s acquisition by Serbia’s MK Group; Agromarket’s deal for Semenarna Ljubljana, a seeds producer, from Dezelna banka and TV2 Media Csoport Zrt’s buy of red Planet TV from Telekom Slovenije.

Large public transactions have been scarce in the post-privatisation years, as the focus has shifted to the consolidation and reorganisation of the previously acquired businesses. Notable recent privatisations include the sale of Abanka Bank to Apollo and a subsequent merger with Nova KBM Bank. In April 2021, a 69.57% stake in Mercator was transferred from Agrokor to Fortenova Group, whereby Mercator became an integral part of the retail division of Fortenova group. The transaction was a final step in a broader restructuring of Fortenova’s predecessor Agrokor.


The COVID-19 pandemic left its mark on M&A activity in 2020 and the first half of 2021. Both in terms of number and size, deals in Serbia declined sharply, to less than 1 billion euro in volume, following massive Chinese investments in the mining industry in 2018. However, activity is gaining momentum, reflecting positive trends in online commerce, IT/ICT sector and pharmacy.

The latest major deal involved a 94.5% stake in Nordeus, a gaming company by Take-Two Interactive Software for consideration of 385 million dollars. Take-Two’s acquisition of Nordeus is the company’s latest strategic initiative to bolster its mobile business following the 2017 and 2020 acquisitions of Social Point and Playdots.

In the beginning of 2021, Baystone Capital and Frontier Pharma Limited agreed to acquire Zdravlje from Teva Pharmaceutical Industries.

The consolidation of the Serbia’s financial sector continued with the acquisition by NLB of 83.23% of Komercijalna Banka from the state. Komercijalna Banka has more than 770,000 active retail clients and the largest branch network in the country. It operates in two other SEE countries – Bosnia and Herzegovina and Montenegro – and has total assets of 3.846 billion euro. NLB’s rationale for this transaction was that the acquisition will strengthen its presence and it will be able to focus on markets in SEE.

Victoria Group, an agro-industrial conglomerate specialised in processing exclusively non-GMO crops, sold its edible oil business Victoriaoil to local company Sun Valley, co-owned by funds managed by Oaktree Capital Management and Vaja Jhashi, the owner of one of the largest agro-industrial holdings in SEE.

The Serbian market continues to attract foreign investors such as Backer, which acquired lektrotermija, Gucci Group which bought Rossi Shoes, Slovakia’s DSC, which acquired Blackhorse FAS, a battery producer, and Britain’s Frontier Pharma and Baystone Investment Group, which took over lab company Zdravlje.

Comments are closed.