Mergers and acquisitions worth 7 billion euros are anticipated this year in Greece, with most seen coming from privatizations and banks’ sales of non-core activities, according to a report presented on Tuesday by PricewaterhouseCoopers, provided that the government’s relations with its creditors do not turn sour.
The PwC report showed that just 29 mergers and acquisitions took place in Greece last year, with a total value of just 1.4 billion euros. This is the second lowest since the start of the recession in 2008, with the smallest annual amount recorded in 2012 (1 billion euros). It was also 39 percent lower than in 2014.
Importantly, the deals struck last year were of a lower value on average, amounting to just 47 million euros per transaction – i.e. 30 percent lower than in 2014 (67 million). Just four transactions exceeded 100 million euros apiece. They were the acquisition of 80 percent of the Pharmathen pharmaceutical company by the BC Partners fund for 470 million euros, the sale of 80 percent of Eurolife by Eurobank to Canadian fund Fairfax for 316 million euros, the sale of the Egyptian subsidiary of Piraeus Bank to Al Ahli Bank of Kuwait for 139.8 million euros, and the acquisition of Nautilus Offshore Services Inc by Ocean Rig UDW Inc (a DryShips Inc subsidiary) for 105.7 million euros.
There was investor inactivity on the privatizations front too, as they practically froze last year, with revenues amounting to just 268 million euros against a target for 2.2 billion euros, according to the bailout agreement revised in April 2014.
For this year, PwC estimates that privatizations could fetch 2.15 billion euros provided that the concession of 14 regional airports continues unhindered, the sale of 66 percent of gas network operator DESFA proceeds, the agreement for the sale of 90.17 percent of Astir Palace Hotel is completed and the concessions of the port authorities of Piraeus and Thessaloniki, of Trainose, Egnatia Odos and 49 percent of the Independent Power Transmission Operator (ADMIE) are implemented.
Besides sell-offs, PwC anticipates that Greek banks will continue asset sales to the tune of 3.3 billion euros, including that of National Bank’s Turkish subsidiary, Finansbank, for 2.75 billion euros.
As for transactions involving distressed debt funds, PwC special consultant Costas Mitropoulos foresaw only a handful taking place within 2016 as they require time-consuming procedures. He also said that only eight out of 780 major hotels around the country could attract investor interest.