Главная страница

Newswire
Stock Indexes
Exrate
Equities
Analysis


About AK&M
Services
Site Map
Support

News ServiceForexMarket AnalysisProducts and Services
09/01/2014
18:08
Total amount of Top 30 M&A transactions up 2.6 times

AK&M Information Agency prepared a ranking of the Top 30 mergers and acquisitions in Russia's M&A market in 2013. This ranking highlights the trends typical for the domestic M&A landscape as a whole: the dominance of the oil and gas sector, growing international isolation (with rarer cross-border transactions), and preponderance of state-owned companies.

The ranking represents the significant growth of Russia's M&A market in 2013. The total amount of transactions on the Top 30 list increased 2.6-fold to $85.86 billion from $32.64 billion in 2012 (the list of Top 30 M&A events in 2012 was updated with account of the recently disclosed information on transaction values).

In 2013, the mergers and acquisitions market grew at nearly the same pace, AK&M Information Agency's analysts point out. In January-October 2013, its total volume increased 2.5 times year-on-year and topped the $100 billion mark for the first time since the crisis.

This growth is mainly accounted for by the acquisition of TNK-BP by Rosneft for $54.98 billion in March 2013, the largest ever transaction in Russia's M&A market certainly placed on top of the ranking.

It should however be noted, AK&M analysts add, that the total amount of the Top 30 transactions excluding the epic TNK-BP deal failed to grow year-on-year and even decreased by 5.4% to $30.88 billion. This indicates that major players tend to be moderate in expenses. The lowest transaction value on the Top 30 list also decreased from $500 million in 2011 and $400 million in 2012 to $371 million in 2013.

Average deal value in the ranking also decreased to $1.065 billion (excluding the TNK-BP deal) from $1.088 billion in 2012.

The Russian M&A market's international positioning underwent significant changes, domestic transactions now coming to the forefront (22 out of Top 30 largest deals in the ranking were finalized within Russia in 2013, against 18 such deals in 2011).

In money terms, the dominance of domestic transactions in Russia's M&A market is even more obvious: they accounted for 93% of the total amount of transactions in the Top 30 ranking, while the cross-border segments looked humble: Russian investors' transactions abroad contributed 4%, foreign investors' transactions with Russian assets a mere 3% of the total amount (against 60%, 31% and 9%, respectively, in 2012).

The sector breakdown of the market also reveals significant changes. In 2013, the fuel and energy sector was unrivaled in the number and amount of the top 30 M&A events contributing one-third of the total number (10 out of 30) and 76% of the total amount of transactions ($65.386 billion). Rosneft established itself as the top performer spending more than $2 billion on the transaction to consolidate full control over Taas-Yuriakh Neftegazodobycha, aside from the above-mentioned TNK-BP deal worth $55 billion.

The telecommunications sector advanced from the fourth to the second position with 2 transactions for a total of $4.81 billion, with Tele2 Russia involved in both deals: first VTB acquired 100% of the company from Tele2 AB (Sweden) for $3.55 billion (including the amount of debt); late in the year, the bank sold a 50% stake in Tele2 Russia to a consortium of investors including Bank Rossiya and Alexey Mordashov's companies for $1.26 billion.

The electric power sector ranked third owing to just one deal (in 2012, none of the deals finalized in the sector hit the ranking) Gazprom energoholding acquired 89.97% of the shares in Moscow Integrated Power Company (MIPC) for $2.97 billion.

The construction and development sector took one step up the ranking reaching the fourth position. In 2013, 5 transactions in this sector were ranked among 30 major deals (as many as in 2012), although their total amount decreased to $2.88 billion from $3.46 billion the year before. The largest of them was the acquisition of Multinational Logistics Partnership, an operator of industrial and warehousing properties, by Mikhail Gutseriev's BIN Group for $900 million.

The financial sector went down from the third to the fifth position. The number of transactions qualifying for the Top 30 ranking did not change compared with 2012 (3 deals), but their total amount was a mere $2.05 billion against $5.5 billion in 2012. The largest M&A event in the sector was the consolidation by Otkritie FC entities of a controlling stake in Nomos-Bank provisionally estimated at $1.18 billion.

Some sectors lost their positions in the ranking. The M&A performance in the transport sector, the leader of the 2012 ranking, witnessed the most dramatic decline. Only one transaction, the acquisition of National Container Company by the Global Ports group provisionally estimated at $1.6 billion, qualified for the Top 30 ranking in 2013 against 7 such transactions in 2012.

While a definitely wider range of economy sectors (including IT, electric power and services) contributed major deals qualifying for the Top 30 rating, the waning interest of major buyers in the real sector is striking the eye, AK&M analysts point out. In particular, the manufacturing sector was represented by only two deals involving metallurgical assets, one in the food-processing, and one in the chemical / petrochemical industry.

Taking shape as early as in 2011 when infrastructural sectors (transport, telecoms, finance, trade) gained prominence against the backdrop of a weaker industrial production, this trend stems from the general economic situation in Russia; the year 2013 only made it more powerful. The Russian Federal State Statistics Service's data are indicating a prolonged stagnation: in November, industrial production dropped by 1% year-on-year, with a 0.1% decline for the 11-month period. Russia's Ministry of Economic Development recently lowered the 2013 industry growth forecast from 0.7% to 0.1%, the GDP growth forecast from 1.8% to 1.4%. With this in mind, major M&A deals could hardly be expected anywhere across the industrial production sector except for the chemical industry and oil refining segment, AK&M analysts highlight.

State companies are well placed in the ranking again. While the number of transactions effected by directly or indirectly state-owned companies decreased to 5 in 2013 against 10 transactions the year before, their total amount soared 4.6-fold to $63.94 billion from $13.93 billion in 2012 owing to the purchase of TNK-BP by Rosneft. Therefore, state-owned companies effected only 17% of the Top 30 M&A transactions but accounted for 74% of their total amount.

The ranking takes account of transactions aimed at the purchase, sale, or consolidation of at least 50% stakes / shareholdings, or acquisitions of at least 40% majority stakes (where none of the shareholders / investors owns a 50% or greater stake), in companies owned / co-owned by Russian investors or in Russia-based assets, equal to or exceeding $1 million, revealed over the period from January 1 to December 15, 2013.



"AK&M", 09.01.2014

 

Free trial for a week.

TopList Rambler's Top100 Rambler's Top100


CONTACT INFORMATION


Tel: (7-495) 916-70-30 / 71-51
        (7-495) 132-61-76 / 61-73
Fax: (7-495) 132-69-18 / 60-93
        (7-495) 916-71-64 / 70-71
e-mail: postmail@akm.ru
Copyright © 1996-2008 AK&М