Takeover transactions of businesses grew in the Baltic states last year by a third In comparison with 2009. This year investment interest in Estonia, as well as Latvia and Lithuania, is expected to increase. On the one hand, last year’s growth demonstrates recovered confidence in the business environment of these countries, on the other hand, it reflects Scandinavian investors’ opportunities to enter the market at low prices.
“The beginning of the year has been busier and we have been engaged in a larger number of projects than a year ago” confirms Aare Tammemäe, a board member at Redgate Capital, a company which advises on mergers and acquisitions, among other services.
According to Tammemäe, foreign investors, primarily from neighbouring countries, have become more active in the Baltic countries. “Scandinavian investors, for example, but also investors from Russia. Interest in starting new businesses or making purchases here has grown as well. This year will certainly be active, “says Tammemäe.
However, world-wide increased activity in merger and takeover transactions, as well as the number of IPOs, also need to be taken into consideration. These processes are partly being passed on to the Baltic states. “The increased number and volume of transactions of the past year in comparison with 2009 demonstrates the growth in investor confidence,” says Tammemäe. According to him, last year was characterised by large-scale transactions concluded in the Baltic countries by strategic investors who were looking for opportunities to expand. A good example here is the Felix Abba subsidiary of the Norwegian Orkla Group which bought the Kalev Chocolate Factory from Oliver Kruuda.
According to Tammemäe, transactions by private equity funds are a significant indicator of the level of recovery of confidence. “Transactions by private equity funds are still scarce but they exist. It is a positive sign of investors’ recovering confidence in the region. Investors can see growth and they are interested in entering the market,” he explains.
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