Emerging Europe M&A Report 2015/16 has been released by EMIS (a Euromoney Institutional Investor company) and provides insight into recent M&A and private equity developments and future trends in Central, Eastern and South-Eastern Europe.
Here is a short recap excerpt for Slovenia:
After a promising start with a significant number of privatisations in the pipeline, 2015 was disappointing, in particular due to the non-transparent privatization process of Paloma.
While two significant privatisations (of the second largest bank NKBM and the brewery Laško) succeeded, what was scheduled to be by far the biggest sale process (Telekom Slovenije) failed. This was considered a clear sign that the Slovenian government is not yet prepared to privatize companies of any significant size unless the companies in question are distressed. This was confirmed by the asset management strategy adopted in July 2015 by the Slovenian parliament, essentially taking the most interesting Slovenian companies from the market by declaring them either strategic or important assets – meaning that the state will continue to control these companies. The list of strategic assets, in addition to assets in the electricity and utility sectors, includes a number of potentially interesting Slovenian companies such as Triglav, Petrol, Krka, Sava Re and Nova Ljubljanska Banka (NLB).
Private-to-private business transactions increased significantly in 2015, with sizeable deals including the acquisition of 100% of Pekarna Grosuplje by Don Don; 100% of Iskra Zaščite and Varsi by Raycap and 46% of Perutnina Ptuj by SIJ. This trend is expected to continue in 2016, as evidenced by the sale of Trimo, a transaction that signed in December between seven banks and Innova Capital.
There will be additional privatisation processes in 2016, with Cimos already well under way. The Bank Asset Management Company kicked off the tender for Mariborska livarna Maribor, an automotive components maker; and a significant part of the Slovenian hotel sector could be put up for sale. There are also some NPL transactions ongoing with NLB`s EUR 900m portfolio a frontrunner. The biggest challenge for the Slovenian government in 2016 will be the privatization of NLB. Under the EU Commission`s state aid decision, the Slovenian state has to reduce its current shareholding of 100% to 25% and one share by the end of 2017. Based on its asset management strategy, the government intends to achieve this via an IPO, whereby no other shareholder may hold more shares than the government. As NLB remains distressed, this plan seems unrealistic, but, to date, no alternative plan has been presented.
Deals by Value and Volume in Slovenia (2012-2015)
2012 – 34 deals – 376m
2013 – 38 deals – 960m
2014 – 39 deals -923.2m
2015 – 62 deals – 870.8m