In 2013, the M&A market in Ukraine was valued at €15.3B. Now it is only 1% of the amount

The Kyiv School of Economics (KSE) has published a report on the M&A market in Ukraine, its trends and prospects for 2000-2023 with a focus on the 2022 market. According to the study, the year of the full-scale war, 2022 saw the lowest number of deals at 39, and the market valuation fell to €46.8 million.

Nevertheless, the KSE is predicting a post-war boom, the number of deals and transaction value returned to their long-term average. AIN.Capital shares the key findings of the report.

How many deals were made?

  • The number of deals involving Ukrainian firms grew exponentially (+1,032%) in the period 2000-2014. Deal activity has spiraled downwards since the first Russian invasion in 2014, and it hit rock bottom with the second invasion in 2022.
  • The average deal value for the period was 33 million Euro. At its height, with 464 deals announced in 2013, this means the Ukrainian M&A market could be worth something in the region of €15.3 billion per year.
  • The M&A market boomed between 2000 and 2014, but the war with Russia led to a sharp decline in 2022, with just 39 deals worth €46.8 million, which is worth only 1% of 2013’s results. The average deal price was €1.29 million, well below the long-term average of €33 million, and only 2.5% were low-risk deals.
  • M&A market in Ukraine

Who were the buyers?

  • In the sample, Ukrainian firms are the acquirer in 45% of cases, the target in 90% of cases, and in 40% of cases, Ukrainian firms are both the target and the acquirer. This shows that Ukrainian targets are not only attractive to their peers, in Ukraine, but to international buyers too.
  • The willingness of foreign acquirers to acquire Ukrainian firms has dropped significantly after 2014. In 2013 there were 265 foreign acquisitions, but in 2022, there were only 5. This represents a 98% drop in investment.
  • Cyprus (332 deals), Russia (142), and the Netherlands (88) made the most acquisitions in Ukraine in the full period. Post-2014, Cyprus (126) and the Netherlands (26) remain active players, but Russia, obviously, feel to the 9th position (7).
  • Ukrainian acquirers made 238 international deals, in our sample. The Czech Republic (150) and Russia (25) received the lion’s share of the investment, followed by direct neighbors, like Poland, Belarus, Hungary, and Romania (15), and neighboring countries Bulgaria, Estonia, Georgia, Latvia, and Serbia. There were only 10 acquisitions in Western countries.
  • In 2022, 39 deals were closed, 33 of them (86.8%) had Ukrainians among the buyers, and 30 deals were purely domestic.

“Despite the current situation, we expect an inevitable post-war boom in M&A activity. In the meantime, Ukrainian companies should shift their focus to becoming more active buyers, diversifying their investments and prioritizing acquisitions in the relevant industry to reduce unnecessary risks. Despite the difficulties, Ukraine remains open for business and focused on the future,”

The Kyiv School of Economics concludes.