Whereas at present the M&A market is "frozen" due to the diverging perceptions of sellers and buyers, in 2009 we could see it become unfrozen in the wake of some forced sales and of some major Romanian entrepreneurs deciding to give up part of their businesses, says Radu Stoicoviciu, a partner of PricewaterhouseCoopers Romania.
"There are Romanian entrepreneurs with sizeable businesses considering giving up certain business categories," said Stoicoviciu, specifying they are aware they will no longer be able to add value to their businesses.
There could be large deals, of above 100m euros, with a big impact over Romania's M&A market.
For this year, PwC representative estimates the market of deals between private companies will revolve around 5 billion euros, considering the market had reached 4.2bn euros until September. Last September, the overall value of private deals amounted to 7.3bn euros.
In early 2008, Stoicoviciu expected this year's market to hit 9bn euros, but he downwardly revised his projection as many deals were postponed or failed.
"On medium term we'll see some further attempts to seal deals. But on the short term we're seeing many failing transactions. This has a simple explanation: three months ago valuation levels were high, but now potential buyers are no longer willing to pay the same price," says Stoicoviciu.
A deal takes between five and ten months on average to be sealed, but in the future we will also see urgent deals, done by the ones that have no other choice. "(...) We'll see forced, emergency sales," says Stoicoviciu on the basis of discussions he has had with customers.
Until now, sellers dominated the market. As there were several bids, several buyers willing to take on the risk of taking over a new business, sellers used to call the shots. As financial turmoil started, risk aversion surged a