The Baltic M&A market slightly slowed down last year by deal count and more by total disclosed deal value. The pipeline for this year looks strong and we expect the total number of M&A transactions to remain at a level broadly similar to 2023. Notably, a few larger transactions could significantly change the scene - in recent months, the plans to sell several large Baltic companies have been announced, including Luminor, Eco Baltia, Cgates and possibly Citadele Bank. Economic forecasts that the Baltic economies should return to growth this year, combined with a receding inflation and expected cut of interest rates should positively impact M&A activity.
Another key factor are geopolitical tensions which currently act as both a hindrance and a stimulant for deal making. As foreign investors and some local investors view the Baltics with caution, competition between buyers and company valuations have been decreasing, and some local shareholders are considering divesting to diversify risks. This means putting businesses “on the counter” that were not previously for sale. Thus, now is a good time for bolder investors to acquire Baltic businesses at lower prices while having less competition. As an old saying goes, those who don't take risks don't drink the champagne.
The generational change of entrepreneurs is also a growing trend. The first-generation Baltic entrepreneurs who don’t implement succession planning – transferring businesses to children or hired executives – will have to sell their companies sooner or later.
Even though investments in startups were lower on global scale, the proportion of startups and scale-ups in the Top 10 Baltic deals table has remained high (7 out of 10 in 2023; 6 out of 10 in 2022) and we expect this trend to continue.
Read more about the trends in specific market sectors and other insights in Sorainen's annual review of the Baltic M&A market: https://lnkd.in/dbciUqRg
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Partner at WALLESS
2yIndeed good job, congrats!