In the first half of 2024, the Romanian mergers and acquisitions (M&A) market witnessed 124 transactions with an estimated total value of USD 2.3 billion. This marked a 6% decline in the number of deals compared to the 132 transactions (worth USD 3.7 billion) recorded in H1 2023. Despite this, the overall M&A value remained largely stable when excluding the significant acquisition of Enel Group’s Romanian operations by Greece’s Public Power Corporation for USD 1.3 billion, the only mega-deal of H1 2023. Notably, 79% of transactions in H1 2024 had undisclosed deal values, a substantial increase from the historical average of 65% since 2018.
While the volume of M&A deals in Romania rose by 13.8% in H1 2024 compared to H2 2023, the year-over-year decline aligns with a global trend of reduced deal volumes. This period also saw a global increase in deal values by around 20% compared to 2023, making it the strongest first half for deal-making since 2022. Additionally, established markets are showing a robust recovery in 2024, evidenced by a significant rise in mega-deals. This trend is promising for developing and emerging economies, which often follow the patterns set by developed markets.
Strategic investors retained their dominant hold on Romanian M&A during the first half of 2024, accounting for 93% of deal volume, albeit they announced the same number of deals in H1 2023 (115). Notably, this represents the highest market share of strategic investors since the first half of 2019. Global private equity exits fell to their lowest level in ten years during 2023, resulting in a lack of returns to investors, hindering the ability to raise capital for new funds which has in turn impacted private equity backed acquisitions.
From a cross-border perspective, domestic transactions accounted for 43% of the total number of transactions, with 53 deals recorded in H1 2024. Meanwhile, foreign investor appetite rebounded by 17% compared to H1 2023 with 62 deals, accounting for half of total deal volume, which is aligned with historical patterns.
“The Romanian M&A market has consistently performed well in recent years, as reflected in the rising deal volume numbers, especially over the long term. In the first half of 2024, we have seen particularly positive dynamics in the power and utilities sector, where deal volume almost doubled compared to H1 2023. We are also encouraged by the rebound of global and European M&A activity, driven by a significant increase in announced mega-deals worldwide, as well as the ECB’s long-anticipated interest rate adjustment, which will further benefit the dealmaking environment”, said Iulia Bratu, Head of Lead Advisory at EY Romania.
The most active sectors by deal volume were Real Estate, Hospitality & Construction (23 transactions), Power & Utilities (21), and Consumer Products & Retail (20), followed by Health and Technology, each recording 11 transactions. In the first half of the 2024, only 2 transactions with disclosed value surpassing USD 100m were recorded, down from 5 in 2023.
The top 3 largest transactions in H1 2024
The sale of Hungary-based OTP Bank’s operations in Romania to Banca Transilvania, the country’s largest bank, for a consideration of USD 375m.
The acquisition of five light-industrial parks by CTP, Europe’s largest publicly listed developer of industrial and logistics properties, from Globalworth Real Estate Investments’ wholly-owned logistics portfolio, for approximately USD 184m.
The sale of Mihai Viteazu 80 MW wind farm by Spain-based renewable energy company Iberdrola, to Premier Energy for an estimated USD 94m, marking Iberdrola’s withdrawal from the local market.
Other notable transactions announced during the first half of the year included:
The acquisition of a 214 MW solar power project by Enspire Enerji, the investment branch of Turkey-based Entek Elektrik, from Israeli developer Econergy Renewable Energy for USD 35m. The target consisted of two companies – Eco Sun Niculesti, which held development rights and permits, and Euromec-Ciocanari, which owned the land rights of the project.
Investment fund Early Game Ventures’ first exit of the year by selling CODA Intelligence, specialized in cybersecurity solutions and one of EGV I’s first investments, to PDQ Corporation, an international software asset management company, for USD 24m.
Lastly, in terms of country of origin, the most active investors came from the United States – historically a leading investor (10 deals), Austria (8 deals), Germany (7), France and Poland (4 deals each), followed by Italy and the Netherlands, both registering 3 deals.
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