Turning Tides: M&A in Ukraine

22 Травня 2018

Ukraine dealmaking value up 57% in 2017

London/Kyiv, [22.05.2018]: The value of deals in Ukraine’s M&A market climbed to €554m in 2017, up 57% on the previous year, according to a new report from Aequo and Mergermarket.

Denis Lysenko, managing partner at Aequo, said: “The improvement reflects a more benign financial climate in Ukraine. We believe M&A activity is likely to pick up in 2018 compared to 2017, a trend we already saw in the final quarter of last year. This is due to the overall stabilisation of the Ukrainian economy, including FX stabilisation.”

Progress could also be partly due to reforms affecting financial activity in Ukraine, with changes to the country’s capital market infrastructure and new laws on limited liability companies, on shareholder agreements and on squeeze-out, sell-out replacing outdated Soviet-era legislation.

According to Anna Babych, a partner at Aequo: “We have a few large enterprises which may still be attractive to foreign investors. These may not have a huge impact on M&A, but the privatisation law definitely brings greater transparency for international investors, and it will add to the general positive impression of Ukraine.”

While the outlook remains optimistic, more can still be done in terms of pursuing anti-corruption reform and producing a financial climate that is attractive to foreign investors. Katharine Dennys, deputy editor at Acuris Studios, the events and publications division of Acuris, said: “With presidential and parliamentary elections due in 2019, resistance to such measures is a possibility, and it is to be hoped that structural and economic improvement continues to be apparent.”

Further key findings from the report include:

  • The financial services sector continues to dominate M&A dealmaking in Ukraine, accounting for 33% of total deal volume and 33% of total value in 2016-17, while other sectors such as agriculture, energy, mining and utilities (EMU) and technology, media and telecommunication (TMT) also showed steady M&A activity.

  • 75% of deals in 2017 took place between Ukrainian firms, demonstrating a record-high percentage of domestic deals, while structural reform could also forecast increased interest from foreign investors.

  • The Ukrainian economy is expected to see growth for the third consecutive year in 2018, with the World Bank forecasting a 3.5% growth of Ukraine's gross domestic product, compared to a 2.5% growth in 2017.

To view the full report, please click here.

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