The volume of the M&A market with a threshold of $1 million in the first quarter of 2024 decreased slightly compared to the result of the same period last year. This is stated in the bulletin "Mergers and Acquisitions Market" of the AK&M News Agency (issue No. 303).
The total value of transactions in the first three months decreased by 19.4%, amounting to $9.7 billion against $12.04 billion a year earlier. In ruble terms, the amount of transactions in January-March decreased much more weakly — by 3.1% to 875.571 billion rubles from 903.791 billion rubles.
This decrease is partly explained by the fact that in March last year a major transaction in financial institutions was described: VTB Bank acquired FC Otkritie Bank, which it had previously rehabilitated, from the Bank of Russia for $4.83 billion. Technically, the sale of the asset was completed at the end of 2022.
The completion of this transaction is not the only reason for the decline. Thus, the number of transactions also decreased: 95 transactions took place in the reporting period, compared with 106 a year earlier (-10.4%).
The price of realizable assets also decreased: the average transaction cost (excluding the largest) decreased by 24.1% to $52.1 million from $68.6 million, excluding the largest, in the same period of 2023.
In the first quarter of 2024, two transactions were concluded for more than $1 billion. The largest of them took place in the mining sector — Polymetal gold miner sold its Russian assets to Mangazeya Group for $3.69 billion. The second billion—dollar deal was with financial institutions - the sale of 100% of the leasing "Transfin-M" to the company's management for an estimated $1172.2 million. In third place was a cross—border transaction in transport - the January purchase of Kazakhstan's Aqniet Capital LLP, the beneficiary of which is businessman Kairat Itemgenov, of a majority stake in Globaltrans for an estimated $774.5 million.
The volume and number of transactions that, according to our methodology, are classified as domestic (when the asset is located in Russia and the buyer is a Russian resident) has significantly decreased, but the seller is a foreign investor. In January-March 2024, 15 such transactions were recorded with a total value of $727.2 million — this is only 7.5% of the total volume of transactions of the period.
At the beginning of the year, companies from the United States (4 assets), Japan and Germany (2 assets each) were most active in the Russian market, while other countries are rare.
This is due to two factors. The first is the complication of the exit of a foreign investor by law, which we wrote about earlier.
In addition, the second factor intervened: foreign assets are now transferred under temporary management without legal expropriation, but with the actual alienation of the former owners from management and use.
Thus, any transactions with these assets become impossible. It is very likely that this tool will be used much more widely, which will further reduce the sale of foreign assets in Russia.
Read more about the results of the M&A market in issue No. 303 of the monthly bulletin "Mergers and Acquisitions Market" of the AK&M News Agency.
All agency bulletins can be purchased at the AK&M Analytical Bulletins and Research Store.
