Published: October 13, 2010
TMT, energy and financial services to boost dealmaking.
The majority of Russian dealmakers expect to see a rise in M&A activity across the country in the next 12 months, according to a new report.
Almost 80% of those surveyed expect to be busier in the coming year, with 72% predicting that the increased deal flow will stem from the TMT, mining and utilities, energy and financial services sectors.
A New Dawn in Dealmaking, compiled by data service Mergermarket and law firm Goltsblat BLP, questioned 100 Russian M&A practitioners, including financial, legal and private equity players.
Goltsblat BLP managing partner Andrey Goltsblat says dealmakers have given M&A activity in Russia a “big vote of confidence” for the year ahead.
Also surveyed were executives of corporates with turnovers of up to US$1bn, 47% of which disclosed that they are already seeking funding, with more than half stating that the cash is intended to fund M&A.
The rise in activity will be driven by two factors claim 62% of those questioned, namely a global economic recovery and the high level of distressed business sales.
Another driver is expected to be the increase of European and US companies diversifying away from their troubled home markets with Russia being a destination for their cash following the relaxation of regulations governing inbound acquisitions.
Catherine Ford, editor of mergermarket’s research division Remark, believes that the attractiveness of Russia has been boosted by comparatively low entry prices, its growth potential and natural resources.
“Whilst dealmakers will continue to face challenges, such as the complex regulatory environment and high interest rates, these results are very encouraging and implies that Russia is still very much a BRIC force to be reckoned with.”