Baltic M&A market grows 28% in 2016

The level of mergers and acquisitions in the Baltic states grew by 28% in the first four months of this year, bucking a global decline in M&A, according to a report by Prudentia.

In the first four months of this year, 64 transactions were announced in the Baltics. At a global level, the number of transactions was down 21% in first quarter of 2016 compared to the same period last year.

”Industrial or commercial services have been the most in-demand industries in the Baltics, whereas in 2014 and 2015 manufacturing was the leading sector. This year has started very actively for frequently discussed IT&T industry. In first four months of 2016 IT&T sector accounted for 20% of the total deal count, while in the same period last year it was only 9%. Such growth indicates that the market sees a potential in this industry,” Prudentia said in its report.

An increase in lending and the adaptation to recent geopolitical shocks made the Baltics a more attractive option both for local and cross-border investors and the increase in household purchasing power is expected to boost the consumption of goods and services.

The average real wage in Latvia, Lithuania and Estonia rose by 7.4%, 6% and 6.9%, respectively.

Latvia joining the Organization for Economic Co-operation and Development (OECD) should improve investor confidence about the commercial environment in that country, which Prudentia said in the medium term will most likely have a positively effect on the Latvian M&A market.

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