Energy and finance drive the Hungarian merger and acquisition market |
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Budapest, January 27, 2004 - Regional expansion and a focus on core business were the major forces in the Hungarian merger and acquisition market during 2003. MOL, the Hungarian oil and gas company, dominated the ranking of the year's largest transactions 1) as a result of its expansion into Slovakia and Croatia.
“Regional expansion via acquisitions is the key to achieving further growth for most leading corporations in Central Europe,” said Béla Seres, Partner in charge of Financial Advisory Services of Deloitte in Hungary. The Hungarian M&A market was dominated by local firms pushing outside of Hungary to become regional players or foreign firms solidifying their local stake as privatization ends and competition intensifies. “The year's top transactions show how firms with a strong local market presence - both in energy and finance - are moving to become significant players at a regional level,” said Seres.
Energy sector transactions topped the Budapest Business Journal's list of M&A activity for 2003, taking three out of the top 15 places. MOL, the Hungarian oil and gas company, took a stake in Croatian INA, increased its holding in Slovak Slovnaft, and divested most of its local gas distribution interests.
M&A transactions in the banking sector were driven by a similar strategy and the end of privatization. Erste Bank outbid Bank Austria Creditanstalt and GE Capital to purchase Postabank from the state. The Postabank privatization was the last substantial slice of market share available for privatization within the Hungarian retail banking market. In another transaction, OTP, the largest Hungarian bank, expanded abroad and bought Bulgarian DSK Bank.
“Beside regional expansion, a focus on core business is the most important driver of M&A activity. Slower market growth, intensifying competition and the need to enhance effectiveness requires companies to review their activities and divest interests in non-core businesses,” said Seres.
Deloitte was a major force in the Hungarian M&A market during the year, playing a key role in five of the fifteen largest transactions of the year - including the top two as a financial adviser to the buyer or managing the sale in divestment cases. The five transactions came from three economic sectors: resources, banking, and media. Deloitte was named as the “Best M&A House in Hungary” in 2003 by Euromoney magazine.
|
|
Largest Transactions |
Price |
Transaction details |
|
1. |
MOL & INA 2) |
USD 505 mln |
Energy:
|
|
2. |
Erste Bank & Postabank 3) |
EUR 383 mln |
Banking:
|
|
3. |
Vivendi Telecom Hungary |
EUR 325 mln |
Media:
|
|
4. |
OTP Bank & DSK Bank |
EUR 311 mln |
Banking:
|
|
5. |
State Debt Management (AKK) |
- |
Public sector:
|
Source: Budapest Business Journal
Notes:
1) In addition to mergers and acquisitions, the BBJ ranking also included greenfield investments and bond issues.
2), 3) Transactions where Deloitte served as a financial adviser to the acquirer.
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