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Acquisition Opportunities in Romania and Emerging Europe

March 9, 2018

 

Why should you choose Romania as a location for your operations? Is it advisable to acquire a company or make a greenfield investment in Romania? How to correctly identify a local acquisition opportunity? 


For the last few years, Romania's economy has been the most dynamic in Europe, having registered growths of between 7% in 2017 and 3.8% in 2015.

Romania is a strong democracy, a NATO and EU member, attracting more and more interest from Asian, American and overseas investors, since it represents a gateway to both Europe and Eastern Europe / CIS.

As one of the pioneer privately owned market entry and M&A advisory firms in Romania, 

FRD Center has been assisting foreign investors with their acquisition target origination in Romania and has operated under several buy-side mandates. More details at http://market-entry-romania.blogspot.ro/2017/02/deal-origination-in-romania-and-region.html

The purchasing power of the Romanian population increased with 12% in 2016 and with 10% in 2017. Romanian industrial output grew by 8.2% in gross series in 2017 compared to the previous year. 

 

In December 2017 vs. December 2016 Romania registered the highest increase in industrial production of 13.5%, compared to the 4.8% average in the EU28 

 

More details about the Romanian Industrial Manufacturing sector - the most dynamic in Europe are available at http://market-entry-romania.blogspot.ro/2018/02/romanian-industrial-manufacturing.html

Some of the recent foreign investments and crossborder Mergers & Acquisitions in Romania include:

  • Czech investment fund Penta Investment acquired A&D Pharma, the largest pharma group in Romania, in a deal estimated at 300-400 mEUR.

  • British company Vast Resources, which owns two non-ferrous metal mines in Romania, has obtained a 9.5 mUSD financing from Mercuria Energy Trading, one of the biggest independent energy and commodities traders in the world.

  • German group Rewe, which owns the supermarket chain Penny Market, invested some 170 mEUR in Romania, in the last two years. The Penny Market network includes 220 stores, 20 of which were opened in 2017.

  • Oil & gas producer OMV Petrom has completed the construction of two new gas treatment plants. The total investment amounts to over 130 mEUR.

  • Rosendahl Industrial Services, the local subsidiary of the Austrian group Knill Gruppe, has launched an investment of 3.5mEUR for the construction of a new hall to expand the production capacity of the Satu Mare factory where they manufacture metal constructions and parts of metal structures.

  • Romanian startup Holotech Studios, the developer of the real time animation program FaceRig, has received a 2 mUSD investment from U.S. venture capital fund Signal Fire.

  • One United Properties invests 100 mEUR in projects developed on the former industrial platform Automatica. 

  • Danish group Rockwool will invest 50 mEUR in a stone wool plant in Romania. This is the group’s first investment in production in Romania. The production of stone wool at the new plant will start in 2019.

Crossborder M&A deals in the Agri/Food sector in Romania in 2017 / 2018 include: 

  • Smithfield, part of WH Group (China), acquired local meat processors Elit and Vericom. 

  • Danish group Givesco A/S acquired 50% of the shares of local pasta producer, Sam Mills Group, with a combined business of over 140 mEUR. 

  • Mexican company Sigma Alimentos has acquired 51% of the shares of Caroli Foods Group, one of the main packaged meats producers in Romania. 

  • In October 2017, the European Bank for Reconstruction and Development (EBRD) confirmed that it will become a shareholder in the Romanian agribusiness company, Agricover Holding, taking over 13% stakes. 

  • Unilever reached an agreement to buy local ice cream maker Betty Ice for an estimated 80-90 mEUR.

Sectors of interest for crossborder acquisitions in Romania include: healthcare, private medical services, plastic packaging, automotive, food processing, agribusiness, chemicals production and chemicals distribution, furniture manufacturing, IT, BPO, logistics and transport, retail and distribution. 

More details about successful crossborder acquisitions in Romania at http://market-entry-romania.blogspot.ro/2017/01/successful-crossborder-acquisitions-in.html

 

 

*Jackie Bojor works for the FRD Center (www.frdcenter.ro), a market-entry private consulting firm. Services include: Market Research & Analysis, M&A Deal Origination, B2B Matchmaking, Trade Missions, Sourcing and Development in Emerging European markets. 

She can be reached at europa@frdcenter.ro

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