The first quarter of the market of mergers and acquisitions not yet fully reflect the crisis caused by the epidemic of the coronavirus. The volume of transactions remained at the level of last year, about a penny to $10 billion At the same time dramatically increased the number of small transactions, while large transactions are mainly related to earlier agreements. Experts believe that while business owners affected by the epidemic, is not ready to sell it at a substantial discount. Soon, however, the process aktiviziruyutsya, and a number of assets will be transferred to the new owners for the debts.According to research by the AK&M (read it “b”), in the first quarter of 2020 the volume of M&A market remained at the same level as last year — the total amount increased by only 2.2%, to $9.6 billion, however, the Agency notes a sharp increase in the number of transactions in the first three months of the year, has passed 110 transaction that one and a half times higher than last year. Accordingly, the average deal value (excluding the largest) fell by 44.2 percent, to $37.3 million, According to AK&M, the first place in the ranking of the sectors in the first quarter of 2020 took TEK one megadeltas on $3.56 billion In February, the company “Onega holding” acquired from state Corporation VEB.RF 99,57% JSC “Mesopotamia”, the main production asset of the holding “Sibuglemet”. Second place was taken by the power industry with two transactions of $2.1 billion In third place for the quarter came the sector of construction and development with 58 deals for a total of $1.51 billion As noted by the Deputy General Director of AK&M Lyudmila Eremina, quarantine measures related to pandemic COVID-19, has significantly hit the Russian market. Investment strategist, “BCS Premier” Alexander Bakhtin explains that “under conditions of pandemic and restrictive measures many enterprises dramatically worsened their financial performance, therefore, a number of transactions will be of a forced nature.” Back in March, when seriously injured, only China and Europe, the Russian M&A market has reacted accordingly — increased number of small transactions, and large, almost curled.Excluding this transaction, the M&A market would show a decline of 20% compared to the first quarter of 2019. The head of Department of trading operations on the Russian stock market “freedom Finance” George Vashchenko notes that the old transaction will be completed: although the investment is reduced, but the major players still have a lot of money, and planned to try to implement.New deals, he says, little or no for different reasons — the banks are taking a pause for questions about project financing, company alter current budgets, besides the project, if it’s not startups that require revaluation. “High technology demand in principle sustainable. Yandex, Mail.ru Sberbank and other players are unlikely to stop the process of M&A. Investment in retail, Transport, leasing is now risky, and in tourism, in essence, meaningless,” he said.In the study of AK&M says that the coronavirus associated with the sharp drop in the ruble exchange rate in March led to the fact that the majority of small transactions ceased to get into the statistics. In addition, according to Lyudmila Eremina, many companies have abandoned the previously planned acquisitions, guiding its efforts on maintenance of existing assets. Head of M&A at a major Bank notes that because of this situation, the value of the business will be revalued: “This factor limits the desire to buy at the same price, only with a discount of 20-30% due to the depreciating ruble.” However, while sellers are not willing to concede much in price, they still hope that the situation in the economy will begin to improve fairly soon, and hence, sales may be a few months to return to the previous level. “If the crisis drags on, to the end of the year you will see new deals. The most promising sectors — mining, industry, construction”,— said Georgy Vashchenko. According to Alexander Bakhtin, it is possible that some assets will be transferred to the new owners-the creditors for the debts.Polina Smorodskaya
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