M&A market may exceed $6 billion in 2010
2010-12-27 16:11:44
In 2010, activity in the market of mergers and acquisitions (M&A) in Ukraine has increased substantially, and the annual market volume may exceed $6 billion, newspaper Delo reported.
According to a specialized news agency, Mergemarket, in 2010 (excluding the last 10 days), 41 Ukrainian company changed ownership. Last year Mergemarket reported 34 deals with participation of Ukrainian companies.
Mergemarket employees did not include in the list of transactions the two largest deals with metallurgical assets, the publication noted. Those are absorption by Metinvest of Mariupol's Ilyich metallurgical plant, and buying by Vnesheconombank (RF) of the Zaporizhstal plant. Both transactions are not transparent, and their sums were not officially announced, but experts believe that in total it is at least $2 billion.
Among the M&A market trends in 2010 it is possible to mark an increase in the activity of domestic and Russian investors. Russia's largest customer is the state. Investments of state-run Vnesheconombank in Ukrainian assets (ISD and Zaporizhstal) make more than $2 billion.
Among the major national "absorbers", hyperactivity was shown by the structures controlled by businessman Rinat Akhmetov, in particular SCM. In addition to the operation, which resulted in Metinvest becoming the major shareholder of Mariupol's Ilyich mill, SCM also acquired, in particular, pharmaceutical company Pharmacia of Donbass and Renaissance Credit bank.
Businessman Dmytro Firtash also became an active buyer. In September, Ostchem Holding AG controlled by him acquired the largest chemical plant in Ukraine, Concern Stirol.
Ihor Kolomoisky has also brought to fruition an important deal. In May 2010, he completed the purchase of Ukrainian assets in Central European Media Enterprises - CME (TV channels 1+1 and Kino) for $300 million.
Large Ukrainian agricultural holdings also entered the buying market. MHP was the most active buyer. In July, it acquired agricultural companies Interagrotrade and Interagro, in October Ridny Kray, in November Start and Balance farms, as well as co-operative Ukraina (all engaged in cultivation of cereals in Khmelnytsky region, west of the country).
The largest producer of sunflower oil in Ukraine, company Kernel, swallowed one of the largest players in the market of sunflower oil, its rival company Allseeds.
Foreign investors, too, actively expressed interest in Ukrainian assets. By the number of deals, holding the lead is the Horizon Capital direct investment fund. In 2010, it acquired stakes in Vitmark-Ukraine, Datagroup, and became 100% owner of insurance company Fortis Life Insurance Ukraine.
Another direct investment fund, Polish Abris Capital Partners, has acquired a network of grocery stores, Torhovy Svit, in Ternopil (west of Ukraine). The Euroventure fond joined the shareholders of the Ukrainian company Agrokontrakt.
In addition to funds, strategic investors also bought Ukrainian companies. Russian-British TNK-BP acquired Vik Oil. TechnoCom (trademark Mivina) was absorbed by transnational corporation Nestle; Swedish Electrolux AB became the owner of a factory producing household appliances in Ivano-Frankivsk region.
By the number of transactions, the financial segment was the most active. Nine transactions have been concluded on it. Significant changes occurred in the structure of shareholders of bank Forum and UkrSibbank, from which Ukrainian owners have withdrawn.