Avanko Capital advises Danish Skamol A/S on acquisition of a majority share of the brick business of Diatomovy Kombinat, Russia

read more

Avanko Capital sponsored Mergers.ru research on the Russian M&A market – 9M' 2009

read more

Avanko Capital honored by ACQ Magazine with the "Investment bank of the year (boutique) - Russia" awards

read more

Avanko Capital sponsors research project into the Russian M&A market in 2008 by Mergers.ru

Avanko Capital once again sponsored the annual research project by Mergers.ru dedicated to the analysis of the main events and trends in the Russian M&A market.

The analytical report covers all the main completed M&A deals that took place in Russia in 2008.

The analysis focused on certain periods in 2008, the value of the deals, the types of integration, and industrial and national (domestic and cross-border) deals. Sufficient consideration was given to the assessment of the dynamics of the number of deals and market volumes, as well as the factors that influence them.

The report's title - 'A Time of Lost Opportunities' - is primarily related to potential sellers in the M&A market that had a good chance to sell their businesses profitably in the first half of 2008 but didn't take advantage of it. Starting with the second half of 2008, during conditions of growing financial crisis, the national M&A market entered a new phase that was to the advantage of buyers. These are the buyers (especially those that have access to credit) who now possess the key instruments to influence the processes of buying and selling a business.

Generally, in 2008 a relatively small decrease (10-15%) in the M&A market took place - both in the number and value of deals - in comparison with 2007, the most successful year in Russian M&A activity. The total market size reached $110.4 billion or about 6.6% of Russian GDP. (In developed countries this figure tends to be more than 10% of GDP). This was practically equal to the aggregated volume of foreign investment in the Russian economy.

In M&A, the larger players were dominant: 16% of deals resulted in 89% of total income, and the average deal value was about $104.7 million. The most important events took place in the metals sector (the largest deal was between RUSAL and Norilsk Nickel with the acquisition of foreign metallurgical assets by Russian market participants) and in the electricity industry with the large-scale restructuring of RAO UES of Russia's assets. Nineteen percent of the market (in value terms) was formed by acquisitions of Russian companies by foreign companies.

In 2009, a further decrease is forecast, primarily related to the average value of deals. At the same time, the number of deals is not expected to decrease as the experts await the realization of processes in the low and mid-market segments where, at the present time, huge opportunities exist but are only partly taken. As well as this, an increase in the market share of state companies is forecast as they make use of relevant financial resources. As for foreign participants, their activity will not considerably diminish.

Generally, the considerable uncertainty originated by the financial crisis presents the new opportunities for stable players that can make profitable acquisitions on account of companies that underestimated their risks in due time.

Project members

www.mergers.ru is an independent analytical platform dedicated to comprehensive insight and data presentation in the different aspects of theory, practice and legal issues of M&A. Within the project, information on more than 8,200 deals (worth $445 billion) has been accumulated.

To read more, download the report in Russian

Avanko Capital wins "The Best Employer 2008" title

read more