Investors more interested in acquisitions while balance of power shifts back to sellers, study finds

Investment funds and strategic investors have started to show an increasing interest in mergers and acquisitions in Romania, mainly looking at green and conventional energy, the banking and financial sector, consumers goods and the industrial sector, according to a study conducted by CMS Cameron McKenna law firm. The firm’s most recent study on mergers and acquisitions shows a revival of the sellers’ market, at the same time with an increase in the number of deals.

“The risk profile of the ECE region, as an emerging market, continues to be reflected in the terms and conditions for the mergers and acquisition deals. However, given an intensified activity, the way risks are allotted goes back to normal. We can safely say that in 2011 we will see similar conditions for sellers and buyers,” said Helen Rodwell, CEE Head of Corporate Practice with CMS.

The CMS study also shows the balance of power goes back to sellers, after last year buyers were more favored by the market conditions. “2011 will be the year of accumulation and of preparations for next year, when the fruits of this M&A frenzy will be reaped,” said Gabriel Sidere, Managing Partner, CMS Romania.

CMS’ study, which looked at over 1,000 deals the company had intermediated, shows that arbitration is the main way of solving disputes in Central and Eastern Europe – 76 percent of disputes are solved this way, while only 33 percent across Europe, according to 2010 data. Eastern Europe also has rare deals with earnout clauses – only 8 percent.