Foreign companies buying Greek

This year has witnessed takeovers involving local enterprises that have exceeded €5.5 bln

Foreign companies buying Greek

This is evolving into a year of major business deals in Greece, as more than two months before it ends it has already seen large groups in various sectors change hands for a combined sum estimated at a minimum of 5.5 billion euros.

The most recent example was Friday’s announcement of the takeover of 80 branches of Greek sportswear company Cosmos Sport by British group JD Sports, one of the world leaders in this market.

The deal introduces yet another global player into the local market and illustrates that if a Greek company develops a significant network and offers good service, it can become very attractive.

The case of Cosmos, with its price understood to have been particularly good given its recent performance, is no exception: In most cases takeovers have taken place at a cost several times higher than the operating profits (EBITDA) of the companies purchased; the best example of that was the acquisition of food company Chipita by Mondelez.

What multinationals and large foreign funds apparently look for in Greece is companies with a solid base and capital gains, and not any large companies that are teetering, as was the case in the past with the advent of distress funds.

Before Chipita’s $2 billion takeover by Mondelez, the food sector also witnessed the acquisition of Vivartia by the CVC Capital Partners fund for €175 million as well as undertaking debts of €620 million.

Then CVC also obtained a 70% stake in dairy industry Dodoni at about 10 times its EBITDA. The same fund signed an agreement for the acquisition of 90.01% of Ethniki, Greece’s biggest insurer, at a nominal price of €505 million.

Another fund, BC Partners has also played a leading role so far this year: It has acquired Wind Hellas at an estimated price of €970 million, following its takeover of Nova/Forthnet last year. On the other hand, it has divested from Pharmathen, the pharmaceuticals company it had bought six years ago, selling it to Partners Group for $1.6 billion.

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