The number of M&A deals in Bulgaria fell in 2010 to its lowest level since 2007, DealWatch Emerging Europe M&A Report 2010 shows. Only 84 transactions were announced or closed last year, compared to 89 in 2009 and 134 in 2008.
The total value of deals in Bulgaria shrank to EUR 634 million in 2010, falling by 10% compared to 2009. The main reason for the decrease was the unwillingness of owners to sell their businesses at lower prices. Insufficient liquidity on the local stock exchange market and government's decision to delay privatization of large energy and tobacco companies contributed for the drop as well.
The most dynamic sector by deal numbers in 2010 was Manufacturing with 19 deals, followed by Finance and Insurance with 10 transactions. In terms of total deal value, Media and Entertainment ranked first due to the acquisition of the largest private TV broadcaster bTV.
The acquisition of bTV for EUR 296 million by Central European Media Enterprises (CME) was the largest transaction in Bulgaria in 2010, accounting for almost half of the total M&A market for the period.
Bulgarian M&A advisors expect the number of deals in 2011 to increase driven mainly by market consolidation. They believe that despite the outflow of investors from CEE, there are still strategic buyers interested in acquiring Bulgarian assets.
The number of M&A deals in Central and Eastern European countries last year rose by 7.7% to a total of 3,164. The recorded number of transactions was far below the 2008 level when 3,734 deals were registered. The total value of deals reached EUR 142 billion in 2010, surging by 50% compared to 2009.
The most active sector both by transaction numbers and value in 2010 was Manufacturing with 578 deals and a total worth of EUR 34 billion, followed by Finance and Insurance sector with a combined deal value of approximately EUR 25 billion.
The strongest M&A activity in the region both in terms of deal value and volume was seen in Russia: the country accounted for 31.3% of all transactions and 57.8% of the total value of deals. Poland came in second with shares of 18% and 14.8%, respectively. In terms of deal numbers Ukraine was third with 13.3% of all transactions, while in terms of share of total deal value Turkey ranked third with 14.4%.
The largest deal in the CEE, SEE and CIS regions in 2010 was the merger of Russia's biggest potash producers Silvinit and Uralkali with a deal value of nearly EUR 5 billion, which created the world's No.2 player in the sector. The second largest transaction was the acquisition of Uralkali by three private investors for EUR 4.4 billion. The third largest deal was the EUR 4.1 billion acquisition of a 24.9% stake in Turkey's Garanti Bank by Spanish lender BBVA.
Many M&A advisors in the region are optimistic and forecast a slight acceleration of dealmaking in 2011. Although country outlooks are different, most advisors agree that the number of deals could exceed the pre-crisis levels, however the average deal size is expected to decrease.