October 19, 2017

A lost year” is how Gjorgji Georgievski, Partner at ODI in Macedonia, describes the current state of deal-making in his country. “From April onwards things got really slow because of the culmination of the ongoing political crisis,” he explains, adding: “Since the formation of the new Government in June it was normal for things to calm down but soon after we got into a state of waiting for the local elections which eventually took place on October 15, 2017.

Georgievski is looking forward to the last quarter of 2017, when activity should pick up again. “The market is generally slow, with most investors waiting to see how the political crisis will unfold,” he explains. “We’re really optimistic about Q4 and the early months of next year,” he added, pointing to potential deals in the pipeline ranging from notable acquisitions in the freight forwarding and real estate sectors to potential investments in mining operations and a manufacturing company. “In my specific area however,” the TMT specialist said, “there is not much in particular to report, with the telecommunications market having now consolidated between two players. There are continuous investments in infrastructure but there is nothing really to generate substantial work in the market.”

Uncertainty looms over FDI into Macedonia as well, both due to the ongoing political uncertainty and the new Government’s contemplated change in strategy, Georgievski reports. In the past, he says, the Government was dead-set on attracting foreign investors and would “give them everything but the kitchen sink to have them come into the country.” That plan worked in attracting a number of foreign companies that did employ a few thousand people, he says, but there was little trickle down from there. “These companies didn’t really work a lot with local companies as there was a general lack of capacity,” he explains, “and locals have been complaining about the preferential treatment that the internationals were receiving.” The new strategy retains the concept of attracting these foreign investors, especially tech giants, but aims to minimize the preferential treatment they receive, while also making it harder for the companies coming in to not work with the local ones. He says, “how that would work is, as of now, unclear.”

The legal market itself remains more or less unchanged, with the market leaders the same for a decade now, Georgievski reports. “There are some smaller teams coming up that are trying to take on the whales but I am not seeing much of a dent in their market share just yet.” He adds that one interesting rumor circulating is that several regional firms are looking to open up an office in the market. He opted to not give any names given the unconfirmed nature of the buzz, noting only that it would be a “peculiar development given the situation of the market at the moment.”

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