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Prudentia M&A Folio: M&A activity in the Baltics is expected to slow-down in 2015

The results of “Prudentia M&A Folio” review suggest that there has been a noticeable upswing in the Baltic M&A activity over 2014. As for this year, it is expected that the market activity will slow down due to geopolitical situation within the region.

Last year has ended with 163 transactions versus 101 in 2013, representing a growth of 61%. Overall deal activity in the Baltic region follows the general global trend, although with a much more volatile dynamics, likely to be affected by relatively small size and openness of the Baltic economies.

Although the outlook on the global M&A activity for 2015 is bent towards a positive side, we would keep our view on the Baltic M&A activity in 2015 more moderate. Thus, the geopolitical climate has not yet been properly reflected in the recent M&A activity in the Baltic region, and we are yet to witness the size of the effect in 2015.

The deal count among all three Baltic States was fairly similar in 2014. Last year several M&A transactions show that the Baltics are perceived as a unified market by the investors. For example, the merger between Premia Foods and Food Union group as well as the transaction where PZU acquired three insurance service providers all over the Baltic States.

Consolidation among the telecommunication companies in Europe is still a pressing matter today. Hence, market consolidation can be observed due to the large investments necessary to keep up with the recent technological trends driven by the rapidly increasing competition within the industry.

Discussions regarding the integration and further privatization of LMT and Lattelecom were reinvigorated in 2013. This transaction can be motivated by various benefits not only for the two entities involved but also for their current owners and customers, including the government. However, certain risks, that have to be dealt before the possible transaction, might arise due to the merger regarding the control of the new entity and possible objections by the Competition Council of Latvia.

It is possible to take a look at the full version of “Prudentia M&A Folio” review here: Prudentia M&A Folio (296.36 KB)

“Prudentia M&A Folio” is a review of the mergers and acquisitions in the Baltic States, issued quarterly. General market tendencies are discussed within the scope of the review. Furthermore, Prudentia gives its expertise regarding the most appealing M&A sectors in the Baltic States.

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