The price of Brent crude oil falling from USD 115 to USD 60, the devaluation of the rouble, and the implemented economic sanctions, made it more difficult for Russian companies to access the international loans market and significantly affected the Russian M&A market in 2014.
The volume of the international M&A market set a new record last year, reaching USD 3.36 trillion, showing an increase of 44% when compared to 2013. At the same time, the Russian market experienced a decline of 56% in the 11 months of 2014, barely reaching USD 46 billion.
The number of transactions concluded showed an increase of approx. 1%, with the total being 472 transactions, which is USD 1 million more than in the same period of 2013. Activity on the M&A market could be explained by the fact that investors were looking to protect their money from the devaluation of the rouble, which is why they were making investments by buying companies, while the major market players kept clear of any bigger transactions.
The largest number of transactions took place in the area of construction and real estate development, where 63 purchase and sales transactions were concluded. The biggest change in the number of transactions was in the area of finance, where 42 transactions took place, which is 18% less than in 2013.
The import ban on food and agricultural products brought about a rise in the price of such goods. An agricultural sector support programme was implemented in Russia, with the aim of curbing the rapid increase in prices. The given circumstances increased the interest of investors in agricultural companies. In the agricultural sector, the number of transactions grew 22% when compared to 2013. Some of the transactions were due to the exiting of Western companies from the market and some due to the market leaders buying off small companies threatened by bankruptcy. The sales of «Оптифуд» to the company «Белой птице» of Belgorod, with a transaction value of USD 92 million, can be regarded as one of the biggest transactions in the sector.
Aleksei Vorobjov, Investment Agency OÜ analyst