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Emerging
Europe
M&A Report
2016/17

In cooperation with:

January 2017
League tables Contents

CEE Legal Advisors for 2016 4 Introduction 26 The Brexit effect?


CMS Corporate partners from both sides
Firm Number of deals 10 Dealmaking in emerging
of Europe discuss the possible impact of
Europe at a glance
CMS 47 the years referendums and elections on
Headlines from 2016 M&A data
the deal landscape in the region
Dentons 45
for emerging Europe
Schoenherr 34 28 Appendix 1
12 Data in focus: key insights
Regional data and top deal lists
Allen & Overy 26
The global head of EMIS M&A database,
Clifford Chance 26 Stefan Stoyanov, offers further insight 36 Appendix 2
on the stories coming out of 2016s Country data and top deal lists
Sorainen 26
M&A data
Baker & McKenzie 23
14 Transaction trends in
White & Case 21
emerging Europe
Havel, Holasek & Partners 19
CMS partners from across emerging
Hogan Lovells 15 Europe share their market insight and
recent experiences, looking at trends and
developments impacting the regions
League Tables were generated using the LeagueBoard tool available in EMIS DealWatch. The
criteria used for crediting the advisers for the purpose of these league tables, as well as for transactions over the last year
summarising the M&A data presented in this report, include:

Deal Announcement date: 01 January 31 December, 2016.

Emerging Europe geographic area, understood as the dominant country of operations of the
deal target or the location of its main assets, covers: Albania, Belarus, Bosnia and
Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania,
Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia,
Turkey and Ukraine.
Deal Value (excluding net debt): at least USD 1m; for commercial real estate deals at least USD
5m (note: deals with an undisclosed value were accounted for as having a value of zero).

Exclusions: rumoured or failed deals, tender offers through a stock exchange, privatisations
through a stock exchange, convertibles issues, share buybacks, internal restructurings, joint
ventures (unless tangible non-cash assets are exchanged), and employee offers.

The ranking was created based on deal advisory information available, according to our best
knowledge, as of 6 January, 2017. The data can be subject to updates.

2 | Emerging Europe M&A Report 2016/17 3


2016 saw the value of deals Russia and Poland retained their first and second
positions respectively in the deal volume tables, despite
Among the largest deals in CEE were a mix of corporate
and private-equity funded transactions, with buyers
One of the lessons of the year is that political change
does not necessarily mean a brake on activity investors
in central and south-eastern drops in transaction numbers compared with last year.
The rising stars of the region were the Czech Republic
from within the region, Western Europe and Asia. 2016
saw the rapidly growing influence of China as an
are ready and willing to do deals once the outlook
becomes clearer. There are many reasons to be positive
Europe increase to its and Romania. Czech Republic enjoyed the strongest investor into the region, almost doubling its spending about 2017, including the potential pipeline of deals
M&A activity it has experienced for a decade as volumes compared with 2015. US investment into CEE on the waiting to be completed, subject to buyers and sellers
highest level since 2013, rose sharply for the fourth year in a row, and values other hand saw deal values fall by two-thirds in 2016. deciding that the time and price are right.
overtook the previous peak in 2013. Romania too saw a
driven largely by a late rise in deal numbers, the highest since 2013. Overall, dealmakers acted cautiously in 2016, faced with We trust you will find this report useful and encourage
weakness in the global economy and uncertainty you to contact our local teams for additional up to date
flurry of activity including Real estate & construction overtook telecoms, IT and surrounding referendums and elections on both sides of market insight and advice.
a number of megadeals manufacturing to become the most active sector by
number of transactions. In terms of deal value, the
the Atlantic. Many took a wait-and-see approach that
meant some deals were temporarily put on hold.
towards the end of the year. mining sector topped the table, due to a series of major
deals in the sector, including the Glencore-Qatari-
Overall however deal Rosneft stake purchase.

volume in the region was


down on 2015.
Helen Rodwell Radivoje Petrikic
Partner, CEE Corporate Practice Partner, CEE Corporate Practice
helen.rodwell@cms-cmck.com radivoje.petrikic@cms-rrh.com

4 | |Emerging
EmergingEurope
EuropeM&A
M&AReport
Report2016/17
2016/17 5
Number of deals by sector in 2016

Dealmaking in emerging Europe Real Estate &


Construction
Manufacturing Telecoms & IT

at a glance 357 312 265


Finance Wholesale & Retail Services
& Insurance

Highest value of deals in the region since 2013, driven by a 191 190 145
number of megadeals towards the end of 2016 Mining Food & Beverage Other
(incl. oil & gas)
Deal numbers across CEE were down for the fifth
successive year and are at less than half the level of
2011, when there were 4,175 transactions. Investors
Swiss-based commodities trader Glencore and the Qatar
Investment Authority jointly took a 19.5% stake in
Russias largest oil producer Rosneft for EUR 10.2bn and
99 95 331
were cautious as global economic growth remained Japans Asahi paid EUR 7.3bn for a portfolio of CEE
weak, amid uncertainty about election and referendum breweries from AB InBev.
results. There were signs however of confidence picking
up towards the end of 2016. Among the 20 largest deals were a mix of corporate and
private-equity funded transactions, with buyers from
Value of deals by sector 2016 2015

The value of deals increased to its highest level since within the region, Western Europe and Asia.
2013, helped by a brace of megadeals in December. Mining

Manufacturing

Deals by volume and by value Telecoms


& IT

Services
2,596 137.6bn
2,558 111.7bn
2,197 62.8bn 2,138 1,985
53.5bn 86.7bn Education &
Healthcare
2012 2013 2014 2015 2016
Real Estate &
Construction
Number of deals Total value of deals (EUR)

Finance &
Insurance

Wholesale
Sectors & Retail

Media &
A series of major mining deals, including the Glencore- Real estate & construction overtook telecoms & IT and Entertainment
Qatari-Rosneft stake purchase, sent deal values in the manufacturing to become the most active sector by
sector soaring by 454%, while the Asahi-AB InBev deal Food &
number of transactions and but for the Rosneft
Beverage
contributed to a 154% increase in food and beverage acquisition it would have been the highest in value.
deal values. Energy &
Utilities

Transport &
Logistics

Agriculture
& Farming

0 2.5 5 7.5 10 12.5 15 17.5 20 22.5 25

Billions (EUR)

6 | Emerging Europe M&A Report 2016/17 7


Most active countries Most active investors in the region

Russia retained the top spot for deal activity despite a sharp drop in transaction numbers and a series of megadeals in The outstanding feature of international investment into CEE in 2016 is the rapidly growing influence of Asian capital.
mining, real estate and manufacturing secured its lead as the number one market by value. However, both were well The total value of Japanese acquisitions into the region surged nearly 30 times to EUR 8.1 billion due to the Asahi-AB
down on the levels of five years ago. InBev deal despite a 22% decline in deal flow overall. In a similar fashion, Singapores investments also reached EUR
2.4 billion the highest since 2012. China ranked sixth by number of deals after a 22% increase, and jumped to third
Poland also saw a drop in deal numbers, down by more than half since the turn of the decade, as values returned place by value after a near-doubling of its spending in the region. Excluding the Asahi-AB InBev deal, China would
close to 2013 levels thanks to a flurry of large transactions. have ranked second behind the UK. This would be well ahead of the US, which was the largest investor in 2015 and
saw deal values fall by two-thirds in 2016. The overall value of UK investment into the region saw an impressive 107%
Czech Republic enjoyed the strongest M&A activity it has experienced for a decade as volumes rose sharply and values increase on last year.
overtook the previous peak in 2013.

Turkey was affected by uncertainty caused by political instability at home and the conflict in Syria. Despite a significant
drop in activity and values against 2015, falling to the lowest levels since 2010, it remains one of the most important Most active investors: by number of deals 2016 2015

M&A markets in the region.

Romanias reputation as a rising star was highlighted by a rise in deal numbers, the highest since 2013. Although US
US

values were down on 2015, they were at their third highest level since 2010. UK
US

UK
Germany
UK
US
France
Germany
UK
Most active countries: by number of deals 2016 2015 US
France 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Germany
Germany
US
UK
Russia UK 0
France 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Russia
Russia Germany
Russia
Russia
Poland
Russia
Poland
Poland
Russia
France
Germany 0
France
France
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

Poland
Russia
Czech 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Poland
Czech
Poland 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Czech
Republic
Czech
Poland
Republic
Czech
Poland
Republic
Republic
Czech
Turkey
Republic
Czech
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Turkey
Republic
Czech
Turkey
Republic
Turkey
Republic
Most active investors: by value of deals 2016 2015
Romania
Turkey
Romania
Turkey
Romania
Turkey
Romania
Hungary
Romania
Hungary
Japan
Japan
Romania
Hungary
Romania Japan
UK
Hungary 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
Hungary
Hungary
Hungary
0
0
50
50
100
100
150
150
200
200
250
250
300
300
350
350
400
400
450
450
500
500
550
550
600
600
650
650
700
700 UK
Japan
UK
China
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 Japan
UK
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 China
India
Japan
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
0
0 50
50 100
100 150
150 200
200 250
250 300
300 350
350 400
400 450
450 500
500 550
550 600
600 650
650 700
700 China
UK
China
India
UK 0 1 2 3 4 5 6 7 8 9 10
China
India
China 0 1 2 3 4 Billions5 (EUR) 6 7 8 9 10
Most active countries: by value of deals 2016 2015
India
India 0
India
1 2 3 4 Billions5 (EUR) 6 7 8 9 10
0 1 2 3 4 Billions5 (EUR) 6 7 8 9 10
0 1 2 3 4 5 6 7 8 9 10
Russia
Russia
Russia
0 1 2 3 4 5
Billions (EUR)
Billions (EUR)
6 7 8 9 10
Russia
Russia
Poland
Russia
Poland
Poland
Russia
Poland
Russia
Billions
For more inbound investment data, please see Appendix 1. (EUR)
Czech
Poland
Czech
Poland
Czech
Republic
Czech
Poland
Republic
Czech
Poland
Republic
Republic
Czech
Turkey
Republic
Czech
Turkey
Republic
Czech
Turkey
Republic
Turkey
Turkey
Republic
Romania
Turkey
Romania
Turkey
Romania
Turkey
Romania
Hungary
Romania
Romania
Hungary
Romania
Hungary
Romania
Hungary 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
Hungary 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
Hungary
Hungary 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
Hungary 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
0
0 5
5 10
10 15
15 20
20 25
25 30
30 35
35 40
40 45
45 50
50

Billions
Billions (EUR)
(EUR)
8 | Emerging Europe M&A Report 2016/17 9
Most active CEE countries as investors Private equity

There were signs that investors in CEE are gaining the confidence and the capability to carry out significant Private equity firms are showing renewed interest in CEE, reflecting the emergence of target companies of a size that
transactions. Both deal volumes and values coming out of Turkey were lower than 2015, reflecting uncertainty attracts large international investors. The telecoms and IT sector is a particular area of growth.
surrounding its economy.
Biggest private equity deals by value 2016
By number of deals 2016 2015 Rosneft (Russia) EUR 10.2bn purchase of a 19.5% stake by Glencore and QIA

Energeticky AP Holdings (Czech Republic) EUR 3.1bn sale of 62.8% by local private equity structures of J&T
Russia
Russia
Russia
Finance, and Milees Ltd
Czech Republic
Russia
Czech
Russia Republic Grupa Allegro (Poland) EUR 2.9bn takeover by UK private equity consortium
Czech Republic
Poland
Czech Republic
Russia Poland
Czech Republic Pointpark Properties (Czech Republic) EUR 2.4bn takeover by GIC of Singapore
Turkey
Russia
Poland
Poland
Poland Turkey
Czech Republic
Turkey 0
Czech Republic 50 100 150 200 250 300 350 400 450 500 550 600 Mars Entertainment (Turkey) EUR 603m takeover led by IMM Investment and CJ CGV, South Korea
Poland
Turkey 0 50 100 150 200 250 300 350 400 450 500 550 600
Poland 0
Turkey
Turkey 0
50
50
100
100
150
150
200
200
250
250
300
300
350
350
400
400
450
450
500
500
550
550
600
600
Turkey
0 50 100 150 200 250 300 350 400 450 500 550 600
Deal volumes and values
0 50 100 150 200 250 300 350 400 450 500 550 600
0 50 100 150 200 250 300 350 400 450 500 550 600
By value of deals 2016 2015
288 266 28.4bn
10.9bn
Russia
Russia
Russia
2015 2016
Czech Republic
Russia Number of deals Total value of deals (EUR)
Czech
Russia Republic
Czech Republic
Poland
Czech Republic
Russia Poland
Czech Republic
Turkey
Russia
Poland
Poland
Poland Turkey
Czech Republic
Czech Republic
Turkey 0
Poland
Turkey 0
50
50
100
100
150
150
200
200
250
250
300
300
350
350
400
400
450
450
500
500
550
550
600
600 By Sector
Poland
Turkey
Turkey
0 50 100 150 200 250 300 350 400 450 500 550 600
Turkey 0 50 100 150 200 250 300 350 400 450 500 550 600
Real Estate & Telecoms & IT Manufacturing
0 50 100 150 200 250 300 350 400 450 500 550 600
0.0
0.0
2.5
2.5
5.0
5.0
7.5
7.5
10.0
10.0
12.5
12.5
15.0
15.0
17.5
17.5
20.0
20.0
22.5
22.5
25.0
25.0 Construction
Billions (EUR)

Billions (EUR) 65 46 35
Services Finance & Insurance Wholesale & Retail

28 20 19
Education & Food & Beverage Other
Healthcare

13 12 28

10 | Emerging Europe M&A Report 2016/17 11


Data in focus: key insights

The global head of EMIS M&A database, Stefan Stoyanov,


offers further insight on the stories coming out of 2016s
M&A data

Q: How would you describe such as the active involvement of activity to remain stable in 2017. On Q: Will banking be a sector Second, the appointment of Mr.
2016 in terms of M&A activity state corporations and banks in the the list of potential deals is again to watch this year? Trump as US president will rattle
in emerging Europe? deal market. Consolidation in telecom group P4, whose sale was emerging markets through several
In 2017 we expect to see more
sectors like finance, oil & gas, postponed last year but is likely to channels. One is the surge of the
It was a tremulous year, yet it was deals in the banking sector. Low
telecoms and agriculture will go on attract the interest of prominent dollar against the euro which is
not all doom and gloom. Although profits, the ongoing restructuring
and inbound transactions will be foreign funds including KKR, likely to widen as the Federal
there were fewer transactions than of Greek lenders, the billions in fees
mostly driven by Middle Eastern Advent and CVC. Reserve increases interest rates. It is
in 2015, according to EMIS data imposed on financial institutions, Stefan Stoyanov
and Asian capital. also likely that emerging markets
their median value was higher by new sector regulations and the Global Head of M&A Database
Q: How have the regions will experience capital outflows.
EUR 2m at EUR 11.2m and total Italian banking crisis are all certain EMIS A Euromoney Institutional
Q: What has been the impact of other economies fared? Our bet is that a stronger dollar in
values were at the highest in three to spur even more disposals. We Investor Company
the dramatic events in Turkey? 2017 will ultimately result in more
years. That was despite regional The Czech Republic had a expect to see deals involving both sstoyanov@emis.com
US investments in emerging
tensions stemming from the The political uncertainty and the particularly good year for M&A and full equity ownership and separate
Europe.
prolonged migrant crisis, the instability of the local currency will the largest foreign investors were non-performing loan (NPL)
attempted military coup in Turkey, continue keeping large investors in from Asia, including Singapores portfolios. Among transactions
Having said that, it should be borne
the surprising Brexit vote and the the wait-and-see mode they GIC and CEFC China Energy. In lined up for 2017 are Raiffeisen and
in mind as 2016 showed on at
continued isolation of Russia. adopted after the failed coup in Hungary, bigger deals happened in Deutsche Banks arms in Poland,
least a couple of widely-publicised
The value of private equity deals July. Looking forward, postponed the banking and real estate sectors Gorenjska in Slovenia, VTB and BM
occasions that forecasts can often
entries and exits more than reforms and the slowing of the EU with predominantly domestic and Bank in Ukraine and the still-to-
end up being wrong.
doubled despite a modest decrease accession process will discourage regional buyers, respectively, while materialise sale of Bank Victoria in
in deal flow and alongside Western companies from seeking Slovenias top three transactions Bulgaria.
traditionally large US and UK acquisitions in Turkey in 2017. featured buyers from Japan, the
investors there were prominent Nevertheless, expected big deals USA and Italy. Q: What is the outlook for
deals featuring new funds from include the sales of OMVs unit and M&A in the region?
Qatar, Singapore and South Korea. the KFC restaurant franchises, while In Romania, deal flow was healthy
It is a daunting task to predict how
advisers have been hired on the and the trend of strong inbound
M&A in emerging Europe will
Q: How difficult a year was sale of 600 companies seized by investments remained. Despite
develop, although two scenarios
it for Russia? the government and worth an smaller deals on average, robust
seem probable. First, Chinas
estimated EUR 9bn. fundamentals indicate it will remain
Russian M&A continued to suffer increasing appetite towards foreign
the M&A flagman in Southeast
under the negative influence of acquisitions of well-established
Q: Has government policy in Europe in 2017. Bulgaria had a fairly
Western sanctions, the roubles consumer brands and technology
Poland deterred investors? unremarkable year until two large
collapse, a battered economy companies, coupled with the
transactions at the end of
and political risks. Deals were Although the ruling right-wing regulatory push the country is
December pushed total deal value
predominantly domestic but party PiS imposed a string of facing in the USA, is likely to force it
to the highest since 2013. Bigger
there were also some big foreign investment-adverse taxes and to focus more on Europe and
deals in 2017 could involve a new
investments in oil & gas as regulations, the local real estate Russia. In light of the plummeting
sale of the incumbent telecom BTC
commodity prices increased. sector this year was among the of the British pound, China could
and more banking assets.
The 2017 outlook is challenging, hottest in Europe. With the M&A be also poised to offset the UK
but the M&A dip may not be as scene displaying a certain resilience among emerging Europes leading
sharp as previously expected due towards the governments foreign investors in 2017 and may
to certain government measures, unfavourable policies, we expect even land in the top spot.

12 | |Emerging
EmergingEurope
EuropeM&A
M&AReport
Report2016/17
2016/17 13
Although there was a fall in the number of transactions The nervousness of executives was reflected in the
in the region in 2016, a late flurry of activity, including survey results for the CMS European M&A Outlook

Transaction trends in some large deals in December (such as the sale by


SABMiller of its CEE assets to Asahi), resulted in a rise in
2016 report, published in November. Nine out of ten of
the respondents (senior executives from corporates and
total M&A value. However, deal values remained well private equity firms) were less positive about the levels
emerging Europe down on the levels seen at the start of the decade. of activity than a year earlier. However, anecdotal
evidence and the rush to complete deals by the end of
Sentiment was clouded by uncertainty as people went the year suggests that confidence improved once the
to the polls in a number of countries, including the UK outcome of the various polls was known.
where voters made the historic decision to leave the EU,
and the US, where the race to the White House saw
Donald Trump elected president. There were also a
Dealmakers acted cautiously number of important elections across Europe, including
Italy, Austria and Romania.
in 2016, faced with weakness
in the global economy and
uncertainty surrounding
referendums and elections on
both sides of the Atlantic. They
took a wait-and-see approach
that meant some deals were
temporarily put on hold, but as
confidence returned, the year
finished on a strong note and
set the scene for robust
M&A activity in 2017.

14 | |Emerging
EmergingEurope
EuropeM&A
M&AReport
Report2016/17
2016/17 15
Countries Sectors Evolution of NPLs in emerging Europe
The performance of individual countries in the region Across the region, the most active sectors by volume
varied widely, reflecting the heterogeneous nature of the were real estate and construction, manufacturing, The pressure on banks to clean up
region. Some enjoyed strong economic growth and telecoms and IT, finance and insurance, and wholesale their balance sheets has created an
increased M&A activity, but others were held back by and retail, with the largest deals broadly spread across active market in non-performing Selling NPLs has
political uncertainty and geopolitical tensions. consumer products, mining, energy, telecoms, loans (NPLs) and we expect that to benefits not just
manufacturing and property. continue into 2018.
for banks but also
Russia continued to suffer from the impact of sanctions
imposed by the US and EU. Although the number of In the financial sector, focus in the region was on Holding large portfolios of NPLs for businesses and
Erika Papp
deals declined, a string of large mining transactions non-performing loans (NPLs) as banks sold portfolios to
Partner, CMS Hungary
acts as a financial, regulatory and the broader
meant overall values increased sharply. Investors in clear their balance sheets. That trend is expected to administrative burden for banks. By
erika.papp@cms-cmck.com economy.
Ukraine remained cautious because of tensions in the continue in 2017, leaving banks better capitalised and in a selling these portfolios to a
east of the country, resulting in a sharp fall in deal stronger position to finance M&A activity in the future. specialist fund or collection agency, Erika Papp
volumes though not value. the banks among other things
In energy, there is growing interest and optimism about free up resources to get on with
Romania was a hot spot, enjoying not only the fastest the carbon neutral sectors. This is not just restricted to their core business of lending to
economic growth in the region, but also an increase in renewables but also in nuclear where ageing reactor consumers and corporate Across CEE there is a wide variation
M&A activity and the prospect of more to come fleets are in need of modernisation or decommissioning. customers, benefiting the broader in the approach of regulators.
following the election of a government that signalled a economy. Slovenia has largely been investor
business-friendly approach and a period of political Executives surveyed for our November report predicted friendly. Croatia provides relatively
stability. that industrials and chemicals, closely followed by TMT, Among the big sellers of NPL clear legal guidance on
Alexander Rakosi
would be the hot sectors in Europe in 2017. portfolios in the region are the requirements that NPL transactions
Partner, CMS Austria
Polands economic growth slowed, but was still at a large institutions that operate need to fulfil, while lack of
alexander.rakosi@cms-rrh.com
much higher level than most of its western neighbours. across a number of countries. They regulatory guidance in countries
Notwithstanding the commentary and speculation about
Megadeals and greenfield include Erste Group Bank of such as Bosnia has restricted deal
the anxiety of investors over the agenda of the Austria, Heta Asset Resolution activity.
In 2016 there were fewer megadeals in the region year
government, deal values rose sharply, driven by a string of which is owned by the Austrian
on year. However, the year ended on a high when Asahi
large transactions. state, and affiliates of UniCredit in A country seen as having untapped
agreed to buy the CEE assets of SABMiller for EUR 7.3bn,
Italy. There have also been sizeable potential is Serbia, where legal and
prompted by competition regulators following AB InBevs
Domestic investors were busy in the Czech Republic, NPL sales by regional banks, regulatory restrictions have meant
takeover of SABMiller.
helping to drive up deal volume to the highest level since notably one of the largest banks in limited activity so far. Still, there is
the turn of the decade, helped by growing interest from Slovenia, where there may still be cautious optimism (also with the
Many of the largest transactions were in Poland,
China and Singapore. In Slovakia, there was a steady some smaller deals to be completed involvement of international
including the sale of Allegro a rival to eBay to a
stream of small transactions, but fewer large deals. in 2017. financing/development institutions)
private equity consortium for EUR 2.9bn and the agreed
that the regulatory landscape in
sale of the cable business Multimedia Polska to London-
In the Balkans, the picture was patchy, with Croatia Croatia is expected to be the Serbia will become more investor
based media group Liberty Global for EUR 690.9m. Other
seeing an increase in activity, as both Bosnia and front-runner in the NPL market over friendly.
notable deals include the sale of one of Romanias
Herzegovina and Bulgaria saw M&A volumes similar to the next 18 months, where several
biggest retailers, Profi, to Mid Europa Partners for EUR
the previous year. Meanwhile, Serbia and Slovenia sizeable transactions for the region By the middle of 2018, we expect a
533m.
experienced fewer deals. (ranging from gross exposure large number of these issues to be
amounts between EUR 300m and resolved and until then deal making
Significant developments in greenfield investments
Turkey is going through a period of instability, affected by EUR 800m) have either been in NPLs will remain strong.
included Jaguar Land Rover starting work on its new
the conflict in neighbouring Syria and an attempted coup, completed recently or are currently
factory in Slovakia, Mercedes committing to an engine
both of which deterred investors in the short-term. This in the market. In recent years, Ukraine has also witnessed NPL
plant in Poland, and Amazon opening new fulfilment
was reflected in a drop in M&A in 2016. However, it Romania was one of the most activity in recent times. With 81
centres in the Czech Republic and Poland.
remains a strong emerging market with a young and active markets with deals by various banks (out of a total of 177)
growing population that should offer investors plenty of institutions. Project Neptune, one currently in liquidation, the
opportunities once stability returns. of the largest projects in Romania government (and the banks
and the region at the time, was themselves) are under significant
however pulled in 2015, reportedly pressure to sell off NPLs, and we
with only parts of the transaction are seeing heightened activity as
being consummated. a result.

Sellers renewed commitment to sell NPLs and a solid deal pipeline has resulted
in increased investor interest, both internationally and regionally.
Alexander Rakosi

16 | Emerging Europe M&A Report 2016/17 17


Technology and communications
Emerging Europe is fast becoming engineering projects. That makes
one of the best connected places them very attractive to investors.
in the world and host to
operations by some of the biggest There were some large cross-border
companies in the technology and deals in the sector last year,
communications sector. Among including Liberty Globals
those already well established in EUR 690m purchase of the cable
John Fitzpatrick
the region are CISCO, Microsoft, business of Multimedia Polska, and
Partner, Global Head of M&A
HP, Adobe, IBM, Intel and Oracle. Eurobanks deal to outsource
for the Technology, Media &
technology for its subsidiaries in
Communications Sector Group
One of the foreign technology Romania, Bulgaria, Serbia and
john.fitzpatrick@cms-cmck.com
companies that has been most Ukraine to Accenture. However, a
active in the region is London- feature of M&A activity in the
based software solutions and IT sector in 2016 was a shift towards
services group Endava. In 2016, it smaller deals.
celebrated its 10th anniversary in
Romania by recruiting its 700th Poland is still the dominant market
employee at its Cluj-Napoca centre, in technology and communications,
taking the total number in the but its share is not as great as in the
country to 1,500. Romania past as other countries including
accounts for more than half of its Romania, Bulgaria, Hungary and
global workforce and it also has Ukraine compete to win
operations in Bulgaria, Macedonia, investment.
Moldova and Serbia.
There has been heavy interest from
In some parts of the region, US investors, but also from
technology roots can be traced Germany, France, Italy and the UK,
back to the Soviet era when many as well as Chinese investors who
areas developed engineering have become more active and see
specialties, leaving a legacy of a emerging Europe as a cost-effective
school and university education location from which to serve
system that turns out highly western European markets.
qualified IT specialists. Many cities
in the region have evolved into Private equity firms are also
technological eco-systems that showing renewed interest in the
provide a skilled workforce, a flow sector which is becoming
of IT graduates, fast internet and a increasingly important to the
tradition of working on complex regions economy.

Foreign investors
Although involved in fewer deals than in 2015, Russian The US remained the largest investor by deal volume, but
investors were the most active across emerging Europe in both the number of deals and value were down year on
2016, accounting for the largest number of deals and the year.
biggest investment by value.
One of the features of the past year has been the rising
Western European countries were the dominant foreign level of interest from investors in Asia, most notably
investors in emerging Europe, led by the UK, Germany, China, which was one of the biggest investors into the The software, IT and services segment is very strong and there
France and Austria, but they completed fewer deals year region in 2016. The strong Chinese interest in the region is a very good base of potential employees and an expanding
on year. Of those countries, the UK was the only one to is a relatively recent development. Chinese companies technology eco-system.
increase its level of investment, more than doubling the and banks have carried out detailed research in recent
amount to become the largest European investor into the years, laying the foundations for a wave of investment John Fitzpatrick
region during 2016. into the future.

18 | Emerging Europe M&A Report 2016/17 19


Greenfield investment
Q: Which countries are looking what governments want, which is
to invest in emerging Europe? for investors to bring in more added
value jobs, for example, in
The main inward investment activity engineering, design and R&D.
has come from Western Europe,
with interest also from the US, Q: Are there any signs that
Japan and South Korea. Chinese costs are rising?
Iain Batty
companies are looking closely at
Partner, CEE Commercial Practice
the region. With one or two A paradox of increased investment
iain.batty@cms-cmck.com
exceptions, the levels of Chinese is that some places are seeing
investment have not been huge so labour shortages, driving up wages,
far, but at some stage we can leading to cases of employees
expect a wave of investment from being bussed across borders and
China. even brought in from Mexico and
North Korea. Finding skilled labour
Q: Which sectors are attracting remains a challenge, but the legal
the most interest? obstacles to employing people are
not as great as in Germany or
CEE continues to be a magnet for France, so emerging Europe
companies for manufacturing and remains very attractive to
service centres across a wide range employers.
of sectors including automotive,
retail and IT. Q: What are governments doing
to bring in investment?
Q: What were the landmark
projects in 2016? A wide range of tax breaks, grants
and other incentives are available
There was a ground breaking and investors should hold a beauty
ceremony in Nitra in September to parade to see what is on offer.
mark the start of construction of Countries across the region are very
Jaguar Land Rovers new EUR 1.5bn active in promoting themselves.
vehicle manufacturing plant in Slovakias SARIO development
Slovakia, which is due to start agency stands out as particularly
production in 2018 and will employ proactive.
over 2,000 people. Other
significant developments included Q: What are prospects like for
Mercedes-Benzs plans for an the coming year?
engine plant in Poland, Amazon
announcing two fulfilment centres Although there is some
in Poland and the Czech Republic, nervousness about Russia, Ukraine
and Indias Apollo Tyres opening a and Turkey, the outlook for inward
plant in Hungary. investment in the region remains
positive.
Q: What are the attractions of
the region for foreign
investors?

The main attractions of the region


are political stability, a low-cost but
skilled workforce and good
transportation links with the rest of
Europe. There is, however,
sometimes a divergence between We are seeing a steady stream of companies looking to come here and theres
what investors are looking for and a lot of goodwill on the part of governments to encourage investment.
Iain Batty

20 | Emerging Europe M&A Report 2016/17 21


Rise of the megadeal
There are still a lot of family-owned businesses big enough to attract global
One of the largest deals ever seen and development fund PFR for EUR investors and there are regional companies that could be buyers with support from
in emerging Europe was worthy of 2.5bn. It is a significant deal private equity funds.
a toast when Asahi of Japan because it means more than half of
Dariusz Greszta
bought a clutch of breweries put up Polands banking sector is
for sale following the takeover of controlled by the state. There may
SABMiller by AB Inbev. After already be another deal in the
beating off interest from rivals, making, as Austrias Raiffeisen
Dariusz Greszta
Asahi paid EUR 7.3bn for Bank has been rumoured to be in
Partner, CMS Poland
SABMillers assets in Poland, Czech negotiations for the sale of its
dariusz.greszta@cms-cmck.com
Republic, Hungary, Slovakia and Polish operations. regulatory regimes will remain a magnet for investment.
Romania, sold so as to appease Governments across the region are keen to attract and Succession planning has also become a key issue for
European competition authorities. French energy companies EDF and nurture such investment through tax breaks, grants and owners approaching retirement age. Where their families
Engie put power stations in Poland other incentives. do not want to take over the business, they must seek an
The transaction rounded off a up for sale and the government has external buyer. In the past, a stock market listing or IPO
strong year for megadeals, with been keen to keep them under It should not be forgotten that the region provides an might have been an option, but a developing trend in
much of the action taking place in Polish control. Mid Europa Partners attractive market in its own right with a population of recent years has been a drop in IPOs and a shift towards
Poland, where one of the trends recently put convenience store more than 100m people, rising incomes and a growing trade sales particularly in Poland.
has been the reversal of past chain Zabka Polska up for sale; middle class.
privatisations, as the state buys likely to be the largest private
back assets it considers strategically equity exit in Poland to date, and Obstacles
important in energy, utilities and offering a strong start to the 2017 Deal drivers for buyers
financial services. pipeline of megadeals. The main obstacles to M&A activity in Europe, according
Some European dealmakers hit the brakes in 2016, but to our survey for our November report, were political
It has led to increased M&A activity The outlook suggests megadeal those confident in their strategy and with sturdy finances instability and tighter regulation and although not unique
in the short term, but there is a risk activity may not be as strong as in remained active and sentiment among global buyers to the region, they are key issues in the minds of investors
it could threaten Polands the past, but there is plenty to continued to be strong. looking at, or already operating in, the region.
reputation as a reliable place to do suggest increasing activity in the
business and may deter foreign next tier down, where deal values Corporates with strong balance sheets are seeking to fill There have been cases in the finance, insurance and
investors. are up to EUR 100m. There are a gaps in product ranges and geographical coverage, but energy sectors of western companies retreating from the
number of companies in the region they will have to be quick to beat private equity firms that emerging European markets as a result of feeling
In the largest banking acquisition in that have grown large enough to are continually searching for targets. Finding a bargain discouraged or unwelcome due to policy or regulation.
Poland so far, Italys UniCredit sold attract interest from global buyers remains the primary consideration for buyers. Our Where investors have doubts about stability, there is a
its 32.8% stake in Bank Pekao to and the only question is when they European M&A Outlook report showed that 54% of strong tendency to hold back or look elsewhere.
state-controlled Polish insurer PZU might be put up for sale. executives believed undervalued targets would be the
main driver of buyers activity.
Outlook
As CEE economies and the companies within them
Like the rest of Europe, M&A activity in emerging Europe
mature, there is a growing number of businesses
There was a massive increase in investment from Turkey were among the most active, though at lower in 2016 ebbed and flowed against the background of
becoming big enough to make them attractive to
Singapore and India, while Japan was responsible for the levels than in 2015, while Czech Republic trebled its heavy political uncertainty. One of the lessons of the year
regional and global players.
largest single deal through Asahis CEE brewery takeover. investment to become the largest domestic investor in is that political change does not necessarily mean a brake
CEE. on activity investors are ready and willing to do deals
Currency values and fluctuations continued to be a Deal drivers for sellers once the outlook becomes clearer.
talking point 2016. In CEE, the regions low-cost
advantages were accentuated by the low value of the Attractions of CEE The flip side of the coin is that some sellers are under There are many reasons to be positive about 2017,
euro against the US dollar. The rise in US interest rates in pressure and 65% of respondents in our survey thought including the potential pipeline of deals waiting to be
December widened the gap and the prospect of further However sluggish the global macroeconomic distress would be the greatest sell-side driver. However, completed, subject to buyers and sellers deciding that the
increases by the Federal Reserve in 2017 will play into the environment may have been, the factors that have made sellers are also looking to do transactions for positive time and price are right.
hands of those US-based investors looking to benefit CEE an attractive region in which to do business are still reasons, for example where the business has reached a
from an exchange rate advantage. in place. These include a relatively high annual GDP turning point and needs new financing or a new
growth, a proximity to western markets and the ownership structure.
One sign of the regions growing self-confidence is the availability of a relatively low-cost, highly skilled labour
number of deals that are not reliant on outside investors. force.
This reflects the fact that many domestic companies and
national private equity firms have reached a size where Countries that can offer a stable political climate
they no longer have to sit on the side-lines and can alongside good infrastructure, transport links, the
conduct cross-border deals of their own. Poland and availability of real estate, and attractive legal, tax and

22 | Emerging Europe M&A Report 2016/17 23


Romania, a rising star? Balkans in focus
Q: Why is Romania attracting so Q: Were there any landmark It was a relatively quiet year for Serbia sold the state-owned
much interest? deals? deals in the Balkans but ended with Smederevo steel plant to Chinas He
a significant move by the Bank of Steel Group and there has been
From an economic perspective, There were a number of EUR 100m China. The worlds fifth largest widespread interest in the possible
Romania is the regions hottest plus transactions, the largest of bank opened an office in Serbia, its sell-offs of Belgrades Nikola Tesla
market. It was the strongest which was the sale of one of the first in the Balkans, and was airport and Komercijalna Bank.
performing CEE economy in 2016. countrys biggest retailers, Profi, granted a licence to begin
Horea Popescu Radivoje Petrikic
What gives us confidence in the which was sold for EUR 533m to operating in 2017. It was a busy year for dealmakers in
Partner, CMS Romania Partner, CMS Serbia
future is that it has been a healthy private equity fund Mid Europa Croatia, where transaction volume
horea.popescu@cms-cmck.com radivoje.petrikic@cms-rrh.com
performance built on both Partners. After initially serving Chinese and rose, but in contrast Bosnia has
consumption and industrial growth. Serbian companies, it will become seen progress on privatisations
Q: Which countries is the main hub for conducting come to a halt and has lagged
Q: What has been driving investment coming from? business with other Balkan behind in M&A due to political
Romanias growth? countries. It is expected to herald a fragmentation. Slovenia also saw a
European investors were the most big increase in Chinese investment number of major transactions this
It has an increasingly attractive tax active, followed by the US, but we into the area. year.
regime and in recent years there have also seen Chinese investors
has been a strong anti-corruption studying opportunities. Overall, deal volumes were steady, Political uncertainty in Bulgaria has
drive. VAT has already been cut and but values were lower in 2016. The held back its economy, though the
there is speculation about a whole Q: What is the outlook for picture varied widely between number of deals rose in 2016 and
swathe of further tax cuts and Romania? individual countries in the Balkans, there is some hope activity will
reforms. and because they are so different it accelerate in the coming year
The economy may not be large, is difficult to come to a conclusion should stability return; while in
Q: What are the attractions for but it is a work in progress and about general trends. There were Macedonia investors held back
foreign investors? there is a sense that the country fewer major deals, but a shift ahead of elections.
is firmly on the road to achieving towards smaller scale acquisitions
Although it is known for its its full potential and should benefit meant more activity among Political stability is the key to M&A
relatively low-cost labour, Romania from a period of political stability domestic players rather than the activity and it varies from country
is building a reputation as a country following Decembers election likes of KKR and Blackstone, who to country; as does the level of
with a well-educated workforce results. were more active in the region in government control and the will to
that can perform at similar or even the past. push through privatisations.
higher standards than those in Looking ahead, the pace of
Western Europe, particularly in Banks have been cleaning up their economic growth and M&A activity
TMC and software development. portfolios by shedding NPLs and should be steady, but it will depend
that should help improve lending. It on stability and the ability of banks
Q: What has been the impact on may also prompt some corporate to clean up their NPL portfolios.
M&A activity? customers into restructuring or
asset sales in order to repay debts.
There was a strong rise in the
number of deals and we have seen
values reach levels rarely seen since
the wave of privatisations a decade
ago. One of the interesting features
is that this activity was broadly
spread across the financial services,
consumer goods, and telecoms and
IT sectors. There was also a lot of
activity in automotive components.

We see a lot of new investment coming in and Romania will probably remain one of My impression is that domestic players are starting to play a much more significant
the best performing economies in Europe. I dont see any reason why it wouldnt. role in the M&A market than in previous years.
Horea Popescu Radivoje Petrikic

24 | Emerging Europe M&A Report 2016/17 25


Some of the pessimism surrounding Brexit faded as but whether it will be the catalyst for a broader crisis
financial markets, investors and companies began to remains to be seen. It was not all one-way traffic
weigh up the effects of the decision. There was a lull in though and the election result in Austria was seen as

The Brexit effect? M&A activity in the months before and after the
referendum, but during the autumn and winter there
was a sense of playing catch-up, as the volume and size
bucking the populist trend, as was the victory for the
Social Democrats in Romania.

of deals accelerated. There were also elections in 2016 in Moldova, Croatia,


Macedonia, Montenegro, Serbia and Slovakia, as well as
There is still uncertainty about the terms of departure a referendum in Hungary on EU migrant quotas where
from the EU and a growing realisation that the the results have been clear cut.
Corporate partners Charles Currier (based in London) and Graham withdrawal and negotiation process could take well
beyond the minimum of two years required after the In the meantime, there will be further uncertainty ahead
Conlon (based in CEE) discuss the possible impact of the years triggering of Article 50 (expected in March 2017). of 2017 elections due in Albania, Bulgaria, Czech
Judging by experience, UK investors are likely to be Republic, Hungary, Serbia and Slovenia. Europe as a
referendums and elections on the deal landscape in the region cautious at each key stage in the process, while they whole will be looking at the election results in France,
wait for more clarity on the positions of UK and EU Germany and the Netherlands. M&A activity could well
negotiators. Investments into UK nevertheless continue weaken in advance of the polls and depending on the
There were times during 2016, both in Europe and Top findings and trends from our European M&A to take place, such as SoftBanks acquisition of ARM outcome after the results.
further afield, when it seemed the tectonic plates of Outlook 2016 are: Holdings, and fast-food giant McDonalds decision in
politics and economics were shifting. The UK December to select the UK as its non-US tax base in Populism is not a new concept in the region and some
referendum on EU membership, the US presidential
election, and a slew of referendums and elections across
66% place of Luxembourg. countries have been living with its effects for several
years. There was a lot of nervousness about Poland after
Europe created a sense of uncertainty. feel M&A in Europe will decline Up to this stage, any negative effects of Brexit upon a change of government in 2015 and a focus on
M&A activity in emerging Europe appear negligible. so-called economic patriotism. Despite this, M&A
Shockwaves from those events will continue to be felt There is nothing to suggest that UK companies looking activity was brisk in Poland 2016 and all the signs are
through 2017 and beyond and it may be years before to make investments in the region have put plans on that it will remain so in 2017.
the full impact becomes clear. However, the robust level hold as a result of the referendum. Moreover, CEE and
of M&A activity across Europe and within CEE and SEE 90% SEE countries see Brexit as an opportunity, which allows Poland has enjoyed reasonably robust economic growth,
shows that despite the increased nervousness among are less positive about levels of European M&A them to market themselves to the rest of the world as helped by the cheap zloty, but the populist approach
investors, those who see a strategic and financial logic activity than they were last year an alternative to the UK for investors seeking a route has raised questions over its economic stability. Some of
in deals have not been deterred. into the EU. the deal activity has been driven by positive sentiment,
but some by foreign investors selling businesses in
The decision of British voters to leave the EU came as a In anticipation that UK financial services companies sectors such as energy and finance, where the
surprise to politicians, pollsters and commentators, might lose their passporting rights into the EU, cities in government is keen to fly the Polish flag.
sending out a message that the electorate was 54% CEE and SEE will be keen to present themselves as
dissatisfied with the status quo, anxious about power believe undervalued targets will be the main driver suitable alternative locations with a skilled workforce Hungary has been through a similar process since
drifting to Brussels and worried about the effects of of buy-side M&A and good infrastructure. The challenge will be to joining the single market in 2004. Its style of
globalisation. convince banks and insurers that they are better placed government has sometimes alarmed EU leaders,
than the likes of Frankfurt or Paris. although it has continued to recognise the importance
The prospect of the EUs second largest economy of foreign investment.
breaking away leaves Europe in uncharted waters and Yet, despite the opportunities presented by Brexit and
uncertainty about where it will lead has created volatility 65% the lack of any perceived negative impact upon the CEE The history of the region is marked by political
on financial markets and left dealmakers puzzling about feel that distress will be the greatest sell-side driver and SEE, the question that is confronting investors is the instability, but the recent past shows that when
how they should react. extent to which Brexit provides a pretext for more countries can map out a secure future the region is
political upheaval on a global scale. enormously attractive to investors. Looking ahead, M&A
Results of the survey for our European M&A Outlook activity in individual countries will be influenced by the
2016 report in November showed that confidence A rise in populism was one of the outstanding features outcome of the various elections in the region.
among executives dropped after the UK referendum. 79% of global politics in 2016. The shattering of the status
Their assessment of M&A activity across Europe over the state that cross-border deals into Europe from quo which underpinned the Brexit result was echoed in Investors and dealmakers will also be keeping a watchful
coming year was more negative than before the vote. non-European acquirers will increase the US in November when Donald Trump won the eye on developments in the EU, including Brexit
presidential election and to varying degrees in other negotiations and elections in key countries, as well as on
Two thirds of respondents expected a decline in activity elections and referendums in Europe during the year. the implications of the policies adopted by the new
and none felt more positive than they did a year earlier. president of the US.
It was not all doom and gloom though and despite the In December, the defeat for Italys government in a
more cautious atmosphere the resounding message was When we surveyed executives ahead of the referendum, referendum added to uncertainty surrounding the EU,
that Europe, including CEE and SEE, remained open for 59% expected M&A activity to increase over the next
business. There was renewed optimism about deals 12 months, but in a revised poll after the vote that had Charles Currier Graham Conlon
coming from outside of Europe. fallen to 24%. Partner, Partner,
Head of Corporate at CMS UK Co-Head of International Private Equity
charles.currier@cms-cmck.com graham.conlon@cms-cmck.com

26 | Emerging Europe M&A Report 2016/17 27


Emerging Europe: top 20 deals 2016

Appendix 1: Target Country


of Target
Sector Deal Type Buyer Country
of Buyer
Deal Value
(EUR m)

Regional data and top deal lists


Rosneft Russia Mining (incl. oil & Privatisation Glencore Plc; Switzerland; 10,2001
gas) (19.5%) Qatar Investment Qatar
Authority

Anheuser-Busch InBev Czech Republic; Food & Acquisition Asahi Group Japan 7,3001
businesses in Hungary; Poland; Beverage (100%) Holdings Ltd
Central and Eastern Europe Romania; Slovakia

Bashneft Russia Mining (incl. oil & Privatisation Rosneft Russia 4,726.81
Deals by volume and by value gas) (50.1%)

Energeticky A Prumyslovy Czech Republic Energy & Utilities Acquisition Daniel Kretinsky Czech Republic 3,1423
Holding as (62.8%) - private investor;
Managers of EPH

2,596 2,558 2,197 62.8bn 2,138 1,985 Grupa Allegro Poland Telecoms & IT Acquisition
(100%)
Cinven; Permira
Advisers LLP;
United
Kingdom
2,957.31
137.6bn 111.7bn 53.5bn 86.7bn
Mid Europa
Partners LLP
2012 2013 2014 2015 2016
Bank Pekao SA; Poland Finance & Minority stake PZU SA; Poland 2,508.31
Number of deals Total value of deals (EUR) Pioneer Pekao Investment Insurance (32.8% in Polski Fundusz
Management; Bank Pekao) Rozwoju SA
Pekao Pioneer PTE;
Dom Inwestycyjny Xelion
Number of deals by sector in 2016 PointPark Properties sro Czech Republic Real Estate & Acquisition GIC Pte Ltd Singapore 2,4001
Construction (100%)
Real Estate & Manufacturing Telecoms & IT
Morton Group Russia Real Estate & Acquisition PIK Group Russia 2,050.22
Construction Construction (100%)

357 312 265 Morton Group

Vankorneft ZAO
Russia

Russia
Real Estate &
Construction

Mining (incl. oil &


Acquisition
(100%)

Minority stake
Sergey Gordeev
- private investor

Indian Oil
Russia

India
1,995.22

1,804.51
gas) (23.9%) Corporation Ltd;
Finance Wholesale & Retail Services Oil India Ltd;
Bharat Petroleum
& Insurance Corp Ltd

191 190 145 Uralkali

Arkhangelskgeoldobycha
Russia

Russia
Manufacturing

Mining (incl. oil &


Minority stake
(20%)

Acquisition
Dmitry Lobyak -
private investor

Otkritie Holding
Belarus

Russia
1,486.93

1,367.91
(AGD) gas) (100%)
Mining Food & Beverage Energy Sibur Holding Russia Manufacturing Minority stake Silk Road Fund Co China 1,262.32
(incl. oil & gas) & Utilities (10%) Ltd

99 95 91
Taas-Yuryakh Russia Mining (incl. oil & Minority stake Indian Oil India 1,0001
Neftegazodobycha gas) (29.9%) Corporation Ltd;
Oil India Ltd;
Bharat Petroleum
Corp Ltd
Transportation Media Education Verkhnechonskneftegaz Russia Mining (incl. oil & Minority stake Beijing Enterprises China 9911
& Logistics & Entertainment & Healthcare gas) (20%) Group Co Ltd

71 62 54 1.
2.
3.
Official data
Market Estimate
EMIS DealWatch Estimate

Agriculture
& Farming

53

28 | Emerging Europe M&A Report 2016/17 29


Target Country Sector Deal Type Buyer Country Deal Value Private equity: top 20 deals 2016
of Target of Buyer (EUR m)

Target Country of Sector Deal Type Buyer Country of Deal Value


Irkutskenergo Russia Energy Minority stake En+ Group Russia 938.61
Target Buyer (EUR m)
& Utilities (40.3%)

J&T Finance Group SE Czech Republic Finance & Acquisition CEFC China Energy China 8613
Rosneft Russia Mining Privatisation Glencore Plc; Switzerland; 10,2001
Insurance (41%)* Co Ltd
(incl. oil & gas) (19.5%) Qatar Qatar
Investment
Vankorneft ZAO Russia Mining Minority stake ONGC Videsh Ltd India 853.21 Authority
(incl. oil & gas) (11%)
Energeticky A Czech Republic Energy & Acquisition Daniel Czech Republic 3,1423
Mail.ru Group Russia Telecoms & IT Acquisition MegaFon Russia 711.5 1 Prumyslovy Holding Utilities (62.8%) Kretinsky
(15.2%)** as - private
investor;
Cable business of Poland Telecoms & IT Acquisition Liberty Global Plc United 690.91 Managers of
Multimedia Polska (100%) Kingdom EPH

Grupa Allegro Poland Telecoms & IT Acquisition Cinven; Permira United 2,957.31
1. Official data Note 1: Note 1: The July stock exchange tender offer from Avast for AVG in the Czech Republic, and (100%) Advisers LLP; Kingdom
2. Market Estimate the July stock exchange privatization of 11% in Alrosa in Russia are not included. Mid Europa
3. EMIS DealWatch Estimate Note 2: The two deals for Morton Group in Russia involve the co-owner of PIK Group Sergey Partners LLP
Gordeev first buying Morton through his company Horus Real Estate Fund and then selling
it to PIK.
PointPark Properties Czech Republic Real Estate & Acquisition GIC Pte Ltd Singapore 2,4001
sro Construction (100%)
* After the deal, CEFC will own 50% of J&T Finance.
** MegaFon will acquire the majority of the voting rights in Mail.ru Mars Entertainment Turkey Media & Acquisition CJ CGV Co Ltd; South Korea 603.51
Group Entertainment (100%) IMM
Investment
Corp; other

Emerging Europe: inbound investment 2016 Helios Group Slovenia; CEE/


SEE
Manufacturing Acquisition
(100%)
Kansai Paint Co Japan
Ltd
5721

Buyer country FY16 Deals FY15 Deals % FY16 Value, EUR m* FY15 Value, EUR m* % Russian Helicopters Russia Manufacturing Capital Russian Direct Russia; 535.71
increase (25%) Investment Greater MENA
USA 88 127 -31% 1,513.6 3,967.9 -62% Fund (RDIF);
Consortium of
Germany 66 88 -25% 1,266.5 3,184.4 -60% Middle Eastern
portfolio
UK 75 73 3% 5,192.0 2,510.6 107% investors

Austria 37 42 -12% 330.2 370.3 -11% Profi Rom Food Romania Wholesale Acquisition Mid Europa United 5331
& Retail (100%) Partners LLP Kingdom
France 46 45 2% 592.5 1,081.2 -45% AvtoVAZ Russia Manufacturing Capital Renaissance Russia 413.31
increase / Capital;
China 28 23 22% 4,350.7 2,223.7 96%
Acquisition existing
Japan 18 23 -22% 8,063.6 284.1 2,738% (56%) shareholders

India 7 6 17% 3,739.9 1,155.5 224% Asist Ogretim Turkey Education Acquisition Turkish private Turkey 3622
Kurumlari (Doga & Healthcare (100%) investor(s)
Singapore 5 6 -17% 2,402.0 32.12 7,378% Koleji)

South Africa 22 9 144% 964.7 1,276.25 -24% Portfolio of 31 Bosnia- Real Estate Acquisition Lone Star United States 3503
retail and office Herzegovina & Construction (100%) Funds
Czech Republic 159 107 49% 3,954.0 1,315.8 200% properties in
Western Balkans
Russia 575 583 -1% 23,024.5 11,200.6 106%
Eldorado Ltd Russia Wholesale Acquisition SAFMAR Russia 327.52
Poland 146 187 -22% 3,871.8 1,696.0 128% & Retail (100%) Financial Group

Turkey 112 131 -15% 2,873.4 4,107.2 -30% Florentinum building Czech Republic Real Estate & Acquisition CEFC China China 282.42
in Prague Construction (100%) Energy Co Ltd

* Only deals with buyers from a single country were considered for the inbound value calculation. Smyk Sp z oo Poland Wholesale Acquisition Bridgepoint United 235.81
& Retail (100%) Capital; Kingdom;
Cornerstone Poland
Partners

Letnany shopping Czech Republic Real Estate & Acquisition Union Germany 234.12
centre Construction (100%) Investment
Real Estate
GmbH

1. Official data
2. Market Estimate
3. EMIS DealWatch Estimate

30 | Emerging Europe M&A Report 2016/17 31


Target Country of Sector Deal Type Buyer Country of Deal Value Top 20 emerging Europe IPOs 2016
Target Buyer (EUR m)

Pharmacy Chain 36.6 Russia Wholesale & Capital Rossium; Russia 229.51 Target Country of Target Sector Deal Value (EUR m)
Retail increase / Baring Vostok
Acquisition Capital Moneta Money Bank as Czech Republic Finance & Insurance 658.6 (51%)1
(58.1%) Partners;
existing RussNeft Russia Mining (incl. oil & gas) 473.8 (20%)1
shareholders
Financial group Budushcheye Russia Finance & Insurance 170.7 (20%)1
Danone Russia Russia Food & Minority stake Groupe France 227.3 2

Beverage (42.5%) Danone SA Celon Pharma SA Poland Manufacturing 57.3 (33%)1

MedLife SA Romania Education & Healthcare 50.7 (44%)1


Globalworth Real Romania; Finance & Capital Growthpoint South Africa; 2001
Estate Investments United Kingdom Insurance increase Properties Ltd; United States X-Trade Brokers SA Poland Finance & Insurance 43.3 (14%)1
Ltd (38.1%) Oak Hill Capital
Stelmet SA Poland Manufacturing 42.2 (20%)1
getBACK SA Poland Services Acquisition Abris Capital Poland 191.41
(100%) Partners Baltic Horizon Fund Estonia Finance & Insurance 29.7 (n.a%)*1
City Tower office Czech Republic Real Estate & Acquisition REICO Czech Republic 1802 Artifex Mundi SA Poland Telecoms & IT 23.3 (42.1%)1
building Construction (100%) investicni
spolecnost Auto Partner SA Poland Wholesale & Retail 19.6 (33%)1
Ceske
sporitelny as
Archicom SA Poland Real Estate & Construction 16.6 (20%)1
1. Official data Note 1: The Private Equity deals include both entries and exits.
2. Market Estimate PlayWay SA Poland Telecoms & IT 14.7 (18.2%)1
3. EMIS DealWatch Estimate

Polski Bank Komorek Poland Education & Healthcare 12.9 (25.3%)1


Macierzystych SA
Deals by value and volume in private equity (2012-2016) Cuhadaroglu Metal Turkey Manufacturing 11.3 (26%)1

Duna House Holding Kft Hungary Real Estate & Construction 8.6 (21.8%)1

255 14.7bn 233 248 288 266 28.4bn i2 Development SA Poland Real Estate & Construction 7.8 (17.5%)1
12.9bn
9.3bn 10.9bn

2012 2013 2014 2015 2016 Master Pharm SA Poland Manufacturing 6.6 (26.2%)1

Number of deals Total value of deals (EUR)


Neo London Capital Bulgaria Real Estate & Construction 5.1 (99.5%)1

Biuro Inwestycji Kapitalowych Poland Real Estate & Construction 4.7 (27.4%)1
SA

TXM SA Poland Wholesale & Retail 4.6 (12%)1

1. Official data * Stake unknown.


2. Market Estimate
3. EMIS DealWatch Estimate

32 | Emerging Europe M&A Report 2016/17 33


Real estate: top 20 deals 2016

Target Country of Deal Type Buyer Country of Deal Value


Target Buyer (EUR m)

PointPark Properties sro Czech Republic Acquisition GIC Pte Ltd Singapore 2,4001
(100%)

Morton Group Russia Acquisition PIK Group Russia 2,050.22


(100%)

Morton Group Russia Acquisition Sergey Gordeev - private Russia 1,995.22


(100%) investor

Plaza Russia Acquisition / VTB Bank Russia 636.52


Debt-for-equity
swap (99.6%)

President Plaza Russia Acquisition Sberbank Russia 508.92


(100%)

Mosmetrostroy Russia Debt-for-equity VTB Bank Russia 411.71


swap (41.6%)

Echo Prime Properties Poland; Acquisition Redefine Properties Ltd; South Africa 3621
BV Netherlands (75%) The Pivotal Fund Ltd

Bonarka City Center in Poland Acquisition Rockcastle Global Real Mauritius 3611
Krakow (100%) Estate Co Ltd

Portfolio of 31 retail and Bosnia- Acquisition Lone Star Funds United States 3503
office properties Herzegovina; (100%)
in Western Balkans Croatia;
Macedonia;
Serbia;
Slovenia

Florentinum building in Czech Republic Acquisition CEFC China Energy Co Ltd China 282.42
Prague (100%)

Q22 office building Poland Acquisition Invesco Real Estate United States 2731
(100%)

Portfolio of seven office Poland Acquisition Echo Polska Properties NV Netherlands 2641
buildings (100%)

Arena Centar Croatia Acquisition New Europe Property South Africa 237.51
(100%) Investments plc

Letnany shopping centre Czech Republic Acquisition Union Investment Real Germany 234.12
(100%) Estate GmbH

Portfolio of seven Czech Acquisition VGP European Logistics * Belgium 233.33


logistic parks of VGP Republic; (100%)
Group Hungary;
Slovakia

City Center One Zagreb Croatia Acquisition Morgan Stanley & Co LLC United States 2201
East; City Center One (65%)
Zagreb West

Porto Montenegro Montenegro Acquisition Investment Corporation of UAE 2002


(54%) Dubai (ICD)

55,000 m2 in Oko tower Russia Acquisition Moscow City Government Russia 196.91
of Moscow-City (100%)
business centre

Buildings A and B of Poland Acquisition Savills Investment United 1861


Gdanski Business Center (100%) Management Kingdom
in Warsaw

City Tower office Czech Republic Acquisition REICO investicni spolecnost Czech Republic 1802
building (100%) Ceske sporitelny as

1. Official data * The buyer is a 50:50 JV between VGP and Allianz.


2. Market Estimate
3. EMIS DealWatch Estimate

34 | Emerging Europe M&A Report 2016/17 35


Top 5 deals in Albania in 2016

Appendix 2: Target

Bankers Petroleum
Sector

Mining
Deal Type

Acquisition
Buyer

Geo-Jade Petroleum
Country of
Buyer

China
Deal Value
(EUR m)

394.61

County data and top deal lists Ltd *

Tirana International
Airport Sh pk
(incl. oil & gas)

Transportation
& Logistics
(100%)

Acquisition
(100%)
Corp

China Everbright Ltd;


Friedmann Pacific
Hong Kong 81.12

Investment Holdings Ltd

Oil exploration Blocks Mining Minority stake Royal Dutch Shell Plc Netherlands 39.51
2-3; Oil exploration (incl. oil & gas) (25%)
Block 4

Albania
Oil & gas operations of Mining Acquisition GBC Oil Co Ltd United 28.91
TransAtlantic Petroleum (incl. oil & gas) (100%) Kingdom
in Albania

Insig Sh a Finance Privatisation Eurosig Sh a Albania 15.81


& Insurance (100%)

1. Official data * The companys main asset is the Patos-Marinza oilfield in Albania.
2. Market Estimate
3. EMIS DealWatch Estimate

Deals by value and volume in


Albania (2012-2016)

561.7m

7 12 9
47.9m
164.1m 5 37.4m
5 31m
2012 2013 2014 2015 2016

Number of deals Total value of deals (EUR)

Number of deals by sector in 2016

Mining Finance & Insurance Telecoms & IT


(incl. oil & gas)

3 2 2
Transportation & Wholesale &
Logistics Retail

1 1

36 | Emerging Europe M&A Report 2016/17 37


Bosnia and Herzegovina
Top 5 deals in Bosnia and Herzegovina in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

RZR Ljubija AD Mining (incl. oil & Privatisation Investment Group Israel 33.41
Prijedor gas) (65%) Overseas

Fabrika Duhana Food & Beverage Privatisation CID Adriatic Investments; Austria; 21.71
Sarajevo dd (FDS) (39.9%) British American Tobacco United
Kingdom

Fabrika Duhana Food & Beverage Tender offer CID Adriatic Investments; Austria; 21.21
Deals by value and volume in Sarajevo dd (FDS) (38.8%) British American Tobacco United
Kingdom
Bosnia and Herzegovina (2012-2016)
Holiday Inn Sarajevo Real Estate & Auction Europa dd za Bosnia- 14.42
Construction (100%) ugostiteljstvo i turizam Herzegovina

MF Banka AD Finance & Insurance Minority stake KfW; Germany; 4.51


Banja Luka (23.1%) Nederlandse Netherlands
152m Financierings-
21 19 98.3m 19 20 72m
21 98.1m
Maatschappij voor
Ontwikkelingslanden NV
52.7m (FMO)

1. Official data Note 1: The October stock exchange privatisation of Bonsalijek is not included.
Number of deals Total value of deals (EUR) 2. Market Estimate Note 2: The two transactions for FDS were three months apart and involved different sellers.
3. EMIS DealWatch Estimate

Number of deals by sector in 2016

Manufacturing Real Estate & Wholesale & Retail


Construction

8 3 3
Finance & Insurance Telecoms & IT Food & Beverage

2 2 2
Mining
(incl. oil & gas)

38 | Emerging Europe M&A Report 2016/17 39


Bulgaria
Top 10 deals in Bulgaria in 2016

Target Sector Deal Type Buyer Country of Deal


Buyer Value
(EUR m)

United Bulgarian Finance & Acquisition KBC Group Belgium 610.01


Bank Insurance (100%)

Industrial property Manufacturing / Acquisition First Investment Bulgaria 137.42


Kremikovtzi Real Estate (100%) Bank AD

Deals by value and volume in Devin JSC Food & Beverage Acquisition Spadel SA Belgium 112.03
(93.3%)
Bulgaria (2012-2016)
Overgas Mrezhi Energy & Utilities Acquisition / Sasho Donchev Bulgaria 103.41
Capital increase - private investor
(61.4%)

Tokuda Hospital Sofia Education & Acquisition Acibadem Saglik Yatirimlari Turkey 65.01
83 73 1,489m
69 86 1,367.6m
Healthcare (100%) Holding
1,240m 1,067m
63 698.9m Sofia Airport Center Real Estate &
Construction
Acquisition
(100%)
Revetas Capital United
Kingdom
55.02

SRP Solar Bulgaria Energy & Utilities Acquisition Energy MT Bulgaria 34.02
(100%)
Number of deals Total value of deals (EUR)
Dundee Precious Mining (incl. oil Capital increase European Bank for International 31.41
Metals & gas) (10%) Reconstruction and
Development (EBRD)

Logistics centre Real Estate & Acquisition Speedy Group Bulgaria 23.61
Number of deals by sector in 2016 in Gorubliane Construction (76%)

Retail Park Plovdiv Real Estate & Acquisition bauMax Bulgaria Bulgaria 18.02
Construction (100%)
Real Estate & Manufacturing Telecoms & IT
Construction 1. Official data
2. Market Estimate

16 13 12
3. EMIS DealWatch Estimate

Wholesale & Retail Finance & Insurance Services

12 9 7
Energy & Utilities Mining Other
(incl. oil & gas)

4 5 8

40 | Emerging Europe M&A Report 2016/17 41


Croatia
Top 10 deals in Croatia in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Arena Centar Real Estate & Acquisition New Europe Property South Africa 237.51
Construction (100%) Investments plc

City Center One Zagreb Real Estate & Acquisition Morgan Stanley & Co LLC United States 2201
East; City Center One Construction (65%)
Zagreb West

Four Konzum stores and Real Estate & Acquisition Tower Property Fund Ltd South Africa 66.41
Deals by value and volume in shopping centres of Construction (100%)
Agrokor dd
Croatia (2012-2016)
Portfolio of five retail Real Estate & Acquisition Lone Star Funds United States 56.53
and Construction (100%)
office properties

Arenaturist dd Real Estate & Acquisition PPHE Hotel Group Netherlands 49.21

43 611m 52 45
1,071m
52 867.6m Construction (74.2%)
492.5m 419.3m 41 Koncar Manufacturing Privatisation Erste & Steiermarkische Bank dd; Croatia; 47.71
Elektroindustrija dd (20.5%) Privredna Banka Zagreb dd (PBZ); Austria
Zagrebacka Banka; InterCapital
Securities; Raiffeisen Bank
Number of deals Total value of deals (EUR) International AG

Imperial dd Real Estate & Privatisation Valamar Riviera dd Croatia 34.61


Construction (50.1%)

Number of deals by sector in 2016 Intesa Sanpaolo


Card doo
Finance &
Insurance
Minority
stake (31.2%)
Mercury UK Holdco Ltd United
Kingdom
34.11

Suncani Hvar Real Estate & Privatisation Prime Tourist Resorts Slovakia 18.81
Real Estate & Manufacturing Telecoms & IT Construction (29.9%)

Construction Atlantic Grupa dd Food & Minority Allianz ZB Croatia 14.73


Beverage stake (4%)

18 6 6 1.
2.
3.
Official data
Market Estimate
EMIS DealWatch Estimate

Wholesale & Retail Finance & Insurance Food & Beverage

6 6 4
Media & Energy & Utilities Other
Entertainment

3 1 2

42 | Emerging Europe M&A Report 2016/17 43


Czech Republic
Top 10 deals in Czech Republic in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Energeticky A Energy Acquisition Daniel Kretinsky - private Czech 3,1423


Prumyslovy Holding as & Utilities (62.8%) investor; Managers of EPH Republic

PointPark Properties sro Real Estate & Acquisition GIC Pte Ltd Singapore 2,4001
Construction (100%)

J&T Finance Group SE Finance & Acquisition CEFC China Energy Co Ltd China 8613
Insurance (41%)*
Deals by value and volume in
Florentinum building in Real Estate & Acquisition CEFC China Energy Co Ltd China 282.42
Czech Republic (2012-2016) Prague Construction (100%)

Tratova Strojni Services Acquisition CEFC China Energy Co Ltd China 2401
Spolecnost (100%)

153 171 202 8,739.6m Letnany shopping centre Real Estate & Acquisition Union Investment Real Estate Germany 234.12

102 1,279m
5,708.9m 5,017.7m 143 3,395.9m Construction (100%) GmbH

City Tower office Real Estate & Acquisition REICO investicni spolecnost Czech 1802
building Construction (100%) Ceske sporitelny as Republic
Number of deals Total value of deals (EUR)
Portfolio of four logistic Real Estate & Acquisition VGP European Logistics** Belgium 133.33
parks of VGP Group Construction (100%)

Enterprise Office Center Real Estate & Acquisition RSJ Group; Eduard Kucera Czech 111.51
Construction (100%) - private investor; Pavel Republic
Number of deals by sector in 2016 Baudis - private investor

Portfolio of 10 small Real Estate & Acquisition Palmer Capital United 102.61
Real Estate & Manufacturing Telecoms & IT
format retail assets Construction (100%) Kingdom

Construction 1. Official data Note 1: The July stock exchange tender offer from Avast for AVG is not included.

49 38 27
2. Market Estimate Note 2: The February stock exchange tender offer from China Energy Company for Pivovary Lobkowicz
3. EMIS DealWatch Estimate is not included.
* After the deal, CEFC will own 50% of J&T Finance.
** The buyer is a 50:50 JV between VGP and Allianz.

Wholesale & Retail Services Energy & Utilities

17 17 15
Finance & Insurance Education & Other
Healthcare

9 8 22

44 | Emerging Europe M&A Report 2016/17 45


Hungary
Top 10 deals in Hungary in 2016

Target Sector Deal Type Buyer Country of Buyer Deal Value


(EUR m)

Erste Bank Hungary Zrt Finance & Minority Government of Hungary; Hungary; 249.51
Insurance stake (30%) EBRD International

Millennium Towers Real Estate & Acquisition CA Immobilien Anlagen AG Austria 175.01
Construction (100%)

MKB Bank Zrt Finance & Privatization Blue Robin Investments SCA; Luxembourg; 120.11
Insurance (100%) Pannonia Nyugdijpenztar; Hungary
Deals by value and volume in MINERVA Capital Fund
Management
Hungary (2012-2016)
Nordic Light office Real Estate & Acquisition Erste Asset Management Austria 67.01
building Construction (100%)

Two logistic parks of Real Estate & Acquisition VGP European Logistics * Belgium 66.73

1,502.1m 134 162 1,974.7m


136
VGP Group Construction (100%)

102 729m 102 773.4m 1,195.7m Five Accor-branded


hotels in Budapest
Real Estate &
Construction
Acquisition
(100%)
Orbis SA Poland 64.11

14 hotels of Hunguest Real Estate & Acquisition Konzum Befektetesi es Hungary 57.12
Hotels Zrt Construction (100%) Vagyonkezelo Nyrt
Number of deals Total value of deals (EUR)
Park Atrium Real Estate & Acquisition Corpus Sireo Germany 50.02
Construction (100%)

Vaci Corner Offices Real Estate & Acquisition Zeus Capital Partners LP Greece 48.32
Number of deals by sector in 2016 Construction (100%)

FHB Mortgage Bank Co Finance & Minority Takarekbank Zrt Hungary 26.23
Plc Insurance stake (14.7%)
Real Estate & Manufacturing Finance & Insurance
Construction 1. Official data * The buyer is a 50:50 JV between VGP and Allianz.
2. Market Estimate

44 21 19
3. EMIS DealWatch Estimate

Telecoms & IT Wholesale & Retail Energy & Utilities

10 9 7
Transportation & Media & Other
Logistics Entertainment

7 6 13

46 | Emerging Europe M&A Report 2016/17 47


Montenegro
Top 5 deals in Montenegro in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Porto Montenegro Real Estate & Acquisition Investment Corporation UAE 2002
Construction (54%) of Dubai (ICD)

Delta City Shopping Real Estate & Acquisition Homestead Group Holdings United 751
Centre in Podgorica Construction (100%) Ltd; Hyprop Investments Ltd Kingdom;
South Africa

New Tobacco Plant AD Food & Privatisation BMJ Industries FZ-LLC UAE 201
Deals by value and volume in Podgorica (NDKP) Beverage (100%)
Montenegro (2012-2016) Lipka Hotel Real Estate & Acquisition Silk Resort & Spa Montenegro 6.91
Construction (100%)

Ruza Vjetrova Hotel Real Estate & Acquisition Karisma Hotels Adriatic doo Croatia n.a.
Resort Construction (100%) (KHA)

7 93.9m
12
57.6m
10 115.8m
16 96.3m 8 301.9m 1. Official data
2. Market Estimate
3. EMIS DealWatch Estimate
2012 2013 2014 2015 2016

Number of deals Total value of deals (EUR)

Number of deals by sector in 2016

Real Estate & Finance & Insurance Food & Beverage


Construction

4 1 1
Wholesale & Retail Mining
(incl. oil & gas)

1 1

48 | Emerging Europe M&A Report 2016/17 49


Poland
Top 20 deals in Poland in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Grupa Allegro Telecoms & IT Acquisition Cinven; Permira Advisers LLP; United 2,957.31
(100%) Mid Europa Partners LLP Kingdom

Bank Pekao SA; Finance & Minority stake PZU SA; Poland 2,508.31
Pioneer Pekao Insurance (32.8% in Polski Fundusz Rozwoju SA
Investment Bank Pekao)
Management;
Pekao Pioneer PTE;
Deals by value and volume in Dom Inwestycyjny
Xelion
Poland (2012-2016)
Cable business of Telecoms & IT Acquisition Liberty Global Plc United 690.91
Multimedia Polska (100%) Kingdom

Echo Prime Properties Real Estate & Acquisition Redefine Properties Ltd; South Africa 3621

363 11.6bn 285


BV Construction (75%) The Pivotal Fund Ltd

331 9bn
346 279 11.2bn
Bonarka City Center in
Krakow
Real Estate &
Construction
Acquisition
(100%)
Rockcastle Global Real Estate Mauritius
Co Ltd
3611

4.5bn 6.3bn
Q22 office building Real Estate & Acquisition Invesco Real Estate United States 2731
Construction (100%)

Number of deals Total value of deals (EUR) Portfolio of seven office Real Estate & Acquisition Echo Polska Properties NV Netherlands 2641
buildings Construction (100%)

Elektrownia Polaniec Energy & Acquisition Enea SA Poland 244.31


Utilities (100%)

Number of deals by sector in 2016 Smyk Sp z oo Wholesale &


Retail
Acquisition
(100%)
Bridgepoint Capital; United
Cornerstone Partners Sp z oo Kingdom;
235.81

Poland

Real Estate & Manufacturing Services Raiffeisen Leasing Polska Finance & Acquisition PKO BP Poland 195.81
SA Insurance (100%)
Construction
getBACK SA Services Acquisition Abris Capital Partners Poland 191.41

71 38 33
(100%)

Buildings A and B of Real Estate & Acquisition Savills Investment United 1861
Gdanski Business Center Construction (100%) Management Kingdom
in Warsaw

Telecoms & IT Wholesale & Retail Focus Mall Piotrkw Real Estate & Acquisition Rockcastle Global Real Estate Mauritius 1611
Finance & Insurance Trybunalski;
Focus Mall Zielona Gra
Construction (100%) Co Ltd

Galeria Warminska Real Estate & Acquisition Rockcastle Global Real Estate Mauritius 1501

31 25 20 shopping centre

Gdansk Transport
Company SA
Construction

Transportation
& Logistics
(100%)

Acquisition
(29.7%)*
Co Ltd

NDI Autostrada Poland 146.91

Food & Beverage Transportation & Other Gdansk Transport


Company SA
Transportation
& Logistics
Minority stake DIF;
(30%)
Netherlands;
Swiss Life Asset Management Switzerland
141.51

Logistics Ltd

Novago Sp z oo Services Acquisition China Everbright Hong Kong 1231

18 13 30 Konstruktorska Business Real Estate &


Center in Warsaw Construction
(100%)

Acquisition
(100%)
International Ltd

Golden Star Estate BV Netherlands 1201

Axtone Sp z oo Manufacturing Acquisition ITT Inc United States 106.31


(100%)

Echo Polska Properties Real Estate & Capital n.a. n.a. 103.61
NV Construction increase
(12.2%)

1. Official data Note 1: The September stock exchange tender offer from Finaccess Mexico for AmRest Holdings
2. Market Estimate is not included.
3. EMIS DealWatch Estimate
Note 2: The April stock exchange tender offer from Alior Bank for Bank BPH is not included.
* After the deal, NDIA will own 55% of Gdansk Transport Company.

50 | Emerging Europe M&A Report 2016/17 51


Romania
Top 10 deals in Romania in 2016

Target Sector Deal Type Buyer Country of Deal


Buyer Value
(EUR m)

Profi Rom Food Wholesale & Acquisition Mid Europa Partners LLP United 5331
Retail (100%) Kingdom

E.ON Distributie Energy & Utilities Minority stake Allianz SE Germany 217.52
Romania SA (30%)

Globalworth Real Estate Finance & Capital increase Growthpoint Properties Ltd; South Africa; 2001
Deals by value and volume in Investments Ltd Insurance (38.1%) Oak Hill Capital United States

Romania (2012-2016) OMV Petrom SA Mining (incl. oil Minority stake SIF Moldova; other Romania 168.11
& gas) (6.4%)

Shopping City Sibiu Real Estate & Acquisition New Europe Property South Africa 1001
Construction (100%) Investments plc

118 150 131 119 3,071.8m


136 1,977.6m
Albalact SA Food & Beverage Acquisition
(94.8%)
Groupe Lactalis SA France 72.51

1,464m 1,185.0m 2,240.8m


Banca Transilvania Finance & Minority stake undisclosed private n.a. 54.61
Insurance (2.9%) investors

Metropolis Center Real Estate & Acquisition PPF Group NV Czech Republic 502
Number of deals Total value of deals (EUR) Construction (100%)

Green Group Services Acquisition Abris Capital Partners Poland 502


(82%)

Covalact SA Food & Beverage Acquisition Groupe Lactalis SA France 40.92


(99.4%)
Number of deals by sector in 2016
1. Official data
2. Market Estimate
Real Estate & Manufacturing Telecoms & IT 3. EMIS DealWatch Estimate

Construction

21 20 17
Finance & Insurance Wholesale & Retail Services

15 12 11
Food & Beverage Mining Other
(incl. oil & gas)

11 9 20

52 | Emerging Europe M&A Report 2016/17 53


Russia
Top 20 deals in Russia in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Rosneft Mining Privatisation Glencore Plc; Switzerland; 10,2001


(incl. oil & (19.5%) Qatar Investment Authority Qatar
gas)

Bashneft Mining Privatisation Rosneft Russia 4,726.81


(incl. oil & (50.1%)
gas)
Deals by value and volume in Morton Group Real Estate & Acquisition PIK Group Russia 2,050.22
Construction (100%)
Russia (2012-2016)
Morton Group Real Estate & Acquisition Sergey Gordeev Russia 1,995.22
Construction (100%) - private investor

Vankorneft ZAO Mining Minority stake Indian Oil Corporation Ltd; India 1,804.51

882
(incl. oil & (23.9%) Oil India Ltd; Bharat Petroleum

99bn
791 69.8bn
728 683 640 Uralkali
gas)

Minority stake
Corp Ltd

Dmitry Lobyak - private investor Belarus 1,486.93


29.9bn 18.7bn 43.3bn (20%)

Mining Acquisition Otkritie Holding Russia 1,367.91


(incl. oil & (100%)
Number of deals Total value of deals (EUR) gas)

Sibur Holding Minority stake Silk Road Fund Co Ltd China 1,262.32
(10%)

Taas-Yuryakh Mining Minority stake Indian Oil Corporation Ltd; India 1,0001
Number of deals by sector in 2016 Neftegazodobycha (incl. oil &
gas)
(29.9%) Oil India Ltd; Bharat Petroleum
Corp Ltd

Verkhnechonskneftegaz Mining Minority stake Beijing Enterprises Group Co Ltd China 9911
Telecoms & IT Manufacturing Finance & Insurance (incl. oil &
gas)
(20%)

Irkutskenergo Energy & Minority stake En+ Group Russia 938.61

105 95
Utilities (40.3%)

68 Vankorneft ZAO Mining


(incl. oil &
gas)
Minority stake
(11%)
ONGC Videsh Ltd India 853.21

Mining Real Estate & Wholesale & Retail Mail.ru Group Telecoms & IT Acquisition
(15.2%)*
MegaFon Russia 711.51

(incl. oil & gas) Construction M.Video Wholesale Acquisition SAFMAR Financial Group Russia 6853

66
& Retail (57.7%)

68 55 Plaza Real Estate & Acquisition /


Construction Debt-for-equity
swap (99.6%)
VTB Bank Russia 636.52

Russian Helicopters Capital increase Russian Direct Investment Fund Russia; 535.71
Agriculture & Services Other (25%) (RDIF); Consortium of Middle Greater MENA
Farming Eastern portfolio investors

President Plaza Real Estate & Acquisition Sberbank Russia 508.92

41 38 104
Construction (100%)

Nizhnekamskneftekhim Minority stake TAIF Group Russia 499.61


(25%)

AvtoVAZ Capital increase Renaissance Capital; Russia 413.31


/ Acquisition existing shareholders
(56%)

Mosmetrostroy Real Estate & Debt-for-equity VTB Bank Russia 411.71


Construction swap (41.6%)

1. Official data Note 1: The July stock exchange privatisation of 11% in Alrosa is not included.
2. Market Estimate Note 2: The two deals for Morton Group in Russia involve the co-owner of PIK Group Sergey Gordeev first
3. EMIS DealWatch Estimate buying Morton through his company Horus Real Estate Fund and then selling it to PIK.
* MegaFon will acquire the majority of the voting rights in Mail.ru.

54 | Emerging Europe M&A Report 2016/17 55


Serbia
Top 10 deals in Serbia in 2016

Target Sector Deal Type Buyer Country of Deal


Buyer Value
(EUR m)

Timok copper-gold Mining Acquisition / Nevsun Resources Ltd Canada 442.51


project* (incl. oil & gas) Capital increase
(n.a.%)**

Delta City Shopping Real Estate & Acquisition Hyprop Investments Ltd; South Africa; 127.81
Centre in Belgrade Construction (100%) Homestead Group Holdings United
Ltd Kingdom
Deals by value and volume in
Fabrika Automobila Manufacturing Acquisition / Government of the Republic Serbia 711
Serbia (2012-2016) Priboj ad (FAP) Debt-for-equity of Serbia
swap (94.5%)

Zelezara Smederevo Manufacturing Privatisation Hebei Iron And Steel Co Ltd China 46.71
(100%)

44
666m
41 860.9m 25 51 921.3m 29 752.1m
KBM Banka ad Finance &
Insurance
Acquisition
(89.5%)
Andrej Jovanovic - private
investor;
Bojan Milovanovic - private
investor
Serbia 17.73

159m
ZeroCorp Ltd Media & Acquisition Catena Media Malta 151
Entertainment (100%)
Number of deals Total value of deals (EUR)
Avala Film ad Media & Minority stake Sebre as Czech Republic 101
Entertainment (20%)

Mlekara Sabac Food & Beverage Auction (100%) MI Finance doo Serbia 7.71

AIK Banka ad Finance & Minority stake MK Group doo; Serbia 7.71
Number of deals by sector in 2016 Insurance (6.3%) M&V Investments ad;

Aerodrom Ketering doo Services Acquisition Serta UAE 2.41


Manufacturing Finance & Insurance Real Estate & (50%)

Construction
1. Official data * Nevsun will execute the deal by acquiring Reservoir Minerals, one of the owners of the Timok project,

6 5
2. Market Estimate and subsequently increasing its capital.

6 3. EMIS DealWatch Estimate ** Stake unknown.

Media & Telecoms & IT Wholesale & Retail


Entertainment

3 3 2
Food & Beverage Services Other

1 1 2

56 | Emerging Europe M&A Report 2016/17 57


Slovakia
Top 5 deals in Slovakia in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Central Shopping Center Real Estate & Acquisition Allianz SE Germany 1751
in Bratislava Construction (100%)

Portfolio of logistics and Real Estate & Acquisition Macquarie Group Ltd Australia 70.33
light industrial assets Construction (100%)

Portfolio of six retail Real Estate & Acquisition IMMOFINANZ Group Austria 59.33
parks Construction (100%)
Deals by value and volume in
Aupark Piestany Real Estate & Acquisition New Europe Property South Africa 39.51
Slovakia (2012-2016) shopping centre Construction (100%) Investments plc

Logistic park Real Estate & Acquisition VGP European Logistics * Belgium 33.33
of VGP Group Construction (100%)

1. Official data * The buyer is a 50:50 JV between VGP and Allianz.


2,767m 1,854.9m

38 49 717.9m 58 472.5m 47 49 428.5m


2.
3.
Market Estimate
EMIS DealWatch Estimate

2012 2013 2014 2015 2016

Number of deals Total value of deals (EUR)

Number of deals by sector in 2016

Real Estate & Manufacturing Telecoms & IT


Construction

14 6 6
Wholesale & Retail Food & Beverage Energy & Utilities

6 5 4
Education & Finance & Insurance Services
Healthcare

3 3 2

58 | Emerging Europe M&A Report 2016/17 59


Slovenia
Top 10 deals in Slovenia in 2016

Target Sector Deal Type Buyer Country of Deal


Buyer Value
(EUR m)

Helios Group * Manufacturing Acquisition Kansai Paint Co Ltd Japan 5721


(100%)

Portfolio of 23 retail Real Estate & Acquisition Lone Star Funds United States 282.63
and office properties Construction (100%)

Cimos Group Manufacturing Privatisation TCH Cogeme Italy 1101


Deals by value and volume in (92.3%)

Slovenia (2012-2016) Planet Tus shopping Real Estate & Acquisition Greenbay Properties Ltd Mauritius 561
centre in Koper Construction (100%)

Gen-i doo Energy & Utilities Acquisition GEN-EL doo Slovenia 45.11
(50%)

39
62 49 1,329.2m
Intersport Group Wholesale & Acquisition Enterprise Investors Poland 34.51

34 376m
38 960m 923.3m 870.8m
Sava dd
Retail

Finance &
(100%)

Debt-for-equity Kapitalska druzba (KAD); Slovenia 29.41


Insurance swap (45.1%) Slovenian State Holding
(SDH)

Number of deals Total value of deals (EUR) ETI Elektroelement dd Manufacturing Acquisition Andlinger & Company United States 27.51
(76%)

Istrabenz Plini doo Energy & Utilities Acquisition Societa' Italiana Acetilene e Italy 24.22
(51%) Derivati SpA (SIAD)

Perutnina Ptuj dd Food & Beverage Minority stake SIJ Slovenian Steel Group Slovenia 22.81
Number of deals by sector in 2016 (26.1%)

1. Official data Note 1: The January stock exchange tender offer from Heineken for Pivovarna Lasko is not included.
Manufacturing Finance & Insurance Real Estate & 2. Market Estimate * Most of the revenues of Helios Group are attributable to its Slovenian unit.
3. EMIS DealWatch Estimate
Construction

13 8 7
Telecoms & IT Wholesale & Retail Services

4 4 3
Education & Energy & Utilities Other
Healthcare

2 2 6

60 | Emerging Europe M&A Report 2016/17 61


Turkey
Top 20 deals in Turkey in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Mars Entertainment Group Media & Acquisition CJ CGV Co Ltd; South Korea 603.51
Entertainment (100%) IMM Investment Corp;
other

Asist Ogretim Kurumlari Education Acquisition Turkish private investor(s) Turkey 3622
(Doga Koleji) & Healthcare (100%)

Menzelet HEPP; Energy Privatisation Akfen Holding Turkey 361.51


Deals by value and volume in Kilavuzlu HEPP & Utilities (100%)
Turkey (2012-2016) Odea Bank Finance Capital IFC; EBRD; Bank Audi; International; 3061
& Insurance increase undisclosed Middle East Lebanon;
(35.9%) investors Greater MENA

Borajet Havacilik Transportation & Acquisition SBK Holding Turkey 247.62

343
Logistics (100%)

331 16.6bn
262 14bn
240 12.5bn 183
Sebenoba wind power
plant; Karakurt wind power
Energy
& Utilities
Acquisition
(100%)
Guris Insaat Turkey 244.31
11.4bn 5.2bn plant; Samli wind power
plant; Ayvacik wind power
2012 2013 2014 2015 2016 plant; Kapidag wind power
plant; Belen Atik wind
Number of deals Total value of deals (EUR) power plant

Almus HEPP; Energy Privatisation Gulsan Holding Turkey 224.91


Kokluce HEPP & Utilities (100%)

Koc Finansal Hizmetler Finance Minority stake Koc Holding Turkey 201.31
& Insurance (4.7%)
Number of deals by sector in 2016
AlternatifBank Finance Minority stake Commercial Bank of Qatar Qatar 200.51
& Insurance (25%)

Manufacturing Wholesale & Retail Telecoms & IT Turkiye Petrolleri Petrol Wholesale Privatisation Zulfikarlar Holding Turkey 144.51
Dagitim & Retail (100%)

Mado Gida Services Minority stake Venture Capital Bank; Bahrain; 140.22

33 33 23 TFI TAB Gida


Yatirimlari AS
Services
(40%)

Capital
increase
Al Sraiya Holding

The Goldman Sachs Group


Inc; EBRD; Credit Suisse
Qatar

United States;
International;
135.11

(9.9%) Group AG Switzerland


Energy & Utilities Services Finance & Insurance MSC Gemi Acenteligi Transportation & Minority stake United Agencies Ltd Switzerland 129.71
Logistics (30%)

Ronesans Holding Real Estate & Capital IFC International 122.71

20 20 18
Construction increase
(n.a%)*

Polisan Boya Manufacturing Acquisition / Kansai Paint Co Ltd Japan 104.11


Capital
increase
Real Estate & Food & Beverage Other (50%)

Construction Adiguzel HEPP; Energy Privatisation Bereket Enerji Turkey 100.71


Kemer HEPP & Utilities (100%)

13 7 16 Peyman Kuruyemis Food & Beverage Acquisition


(100%)
Bridgepoint Capital United Kingdom 98.22

Netas Telekomunikasyon Telecoms Minority stake ZTE Corp China 94.71


& IT (48%)

Tesco Kipa Wholesale Acquisition Migros Ticaret Turkey 92.41


& Retail (95.5%)

Kalenobel Manufacturing Acquisition Mondi Group United Kingdom; 901


(90%) South Africa

1. Official data * Stake unknown.


2. Market Estimate
3. EMIS DealWatch Estimate

62 | Emerging Europe M&A Report 2016/17 63


Ukraine
Top 10 deals in Ukraine in 2016

Target Sector Deal Type Buyer Country of Deal Value


Buyer (EUR m)

Ukrsotsbank Finance Acquisition Alfa Group Consortium Russia 296.33


& Insurance (99.9%)

MV Cargo group Transportation Acquisition Cargill Inc United States 90.9*1


company & Logistics (51%)

Ellada Oilseed Food & Beverage Acquisition Kernel Holding SA Ukraine 87.11
Crushing Plant (100%)
Deals by value and volume in
Astarta Holding Agriculture Minority stake Fairfax Financial Holdings Canada 34.21
Ukraine (2012-2016) & Farming (10%) Ltd

Piramida Shopping Mall Real Estate & Acquisition Dragon Capital Investments Ukraine 21.92
Construction (100%) Ltd

Foros sanatorium Real Estate & Privatisation Federation of Trade Unions Russia 16.71
342 249 111 140
Construction (100%) of the Republic of Tatarstan

2,245m
4,768.3m
833.1m
504.9m
54 605.3m
Viasat Ukraine Telecoms & IT Acquisition
(85%)
1+1 Media Group Ukraine 16.12

Terminal Brovary Real Estate & Acquisition Rozetka.ua Ukraine 14.61


Construction (100%)
Number of deals Total value of deals (EUR)
Radisson Blu Hotel Real Estate & Acquisition Sergei Tigipko - private Ukraine 9.22
Kiev Podil Construction (100%) investor

Indar Manufacturing Minority stake Georgian Industrial Group Georgia 4.31


(29.3%)

Number of deals by sector in 2016


1. Official data * The deal value represents the amount of investment into the project.
2. Market Estimate
3. EMIS DealWatch Estimate
Finance & Insurance Real Estate & Telecoms & IT
Construction

15 9 8
Manufacturing Wholesale & Retail Energy & Utilities

4 4 3
Mining Transportation & Other
(incl. oil & gas) Logistics

3 3 5

64 | Emerging Europe M&A Report 2016/17 65


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