Companies Overtake State in Mergers, Acquisitions
The Ernst & Young company published the results of its market research on 2006 mergers and acquisitions in the CIS yesterday. It found, as expected, that a new record had been set. The M&A market in Russia reached $71 billion, 46-percent growth over the previous year. More than $11 billion of that sum went toward overseas acquisitions. PricewaterhouseCoopers issued its report on mergers and acquisitions in Central and Eastern Europe a week earlier and found that market totaled $111 billion last year, with 37-percent growth over 2005. The companies used differing methods for their calculations.
E&Y suggested that the competition between state and private companies that was seen in the M&A market in 2006 will continue this year. Mergers decreased among state structures last year, as did their share on the M&A market, to 23 percent. Analysts identify the main transaction on the market last year as the foundation of Russian Aluminum (Rossiisky alyuminy) by Rusal, SUAL and Glencore. More funds were attracted through IPOs as well. In the transactions tracked by E&Y, $18 billion was attracted that way, and that figure will increase significantly in 2007, when the IPOs of Sberbank and Vneshtorgbank are taken into account.
PwC's report shows increasing privatization of activity in the region. The number of privatizations in Central and Eastern Europe increased 52 percent, with 87 percent of them occurring in Russia, Serbia and Ukraine. Privatization is coming to an end, however. The value of the average privatization fell by 70 percent, while the average M&A transaction increased on value from $45 million to $200 million. In Russia, E&Y says, the average transaction was worth $163 million, up 86 percent from 2005.
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All the Article in Russian as of Mar. 30, 2007
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