Hungary’s M&A market shrinks 9% in H1

Analysis

Although Hungary has seen a stable mergers and acquisitions (M&A) market in the first half of the year, a total of 64 deals were publicly disclosed, dropping 9% compared to the first half of 2015, albeit a 7% increase over H2 2015, according to EYʼs M&A Barometer sent to the Budapest Business Journal today.

At the same time, the estimated M&A market size increased by 9% in terms of value versus H1 2015, and by 21% versus H2 2015, EY noted. Unlike previous years, Manufacturing was the most active industry in Hungary, ahead of the IT and Technology sector that has led the market for many years, EY added. 

Transaction values were disclosed and published in 34% of the deals (22), less than the 40% recorded in H1 2015, according to EY. Based on publicly available information, the estimated size of the Hungarian M&A market was USD 0.9 billion. The average deal size of deals with a disclosed deal value below USD 100 million was USD 3.7 million in H1 2016, which represents a 14% decrease from the USD 4.3 million average recorded in H1 2015.

Similarly to previous years, the Hungarian transaction market was dominated by domestic transactions, where in 56% of the deals both the target and buyer were Hungarian entities. The most frequent origins of inbound investments included the USA (five deals), Germany (four deals), and the Czech Republic and Italy (two deals each).

Manufacturing took over the lead from IT and Technology in becoming the most attractive sector. These sectors were followed by Energy and Mining, and Banking and Financial Services.

In the first half of the year, 11 deals occurred in the Manufacturing sector, as compared to eight deals in the corresponding period a year earlier. A total of eight transactions were published in the IT and Technology sector in the period. In the Energy and Mining sector, a total of seven transactions were published; the Banking and Financial Services sector likewise saw seven transactions, while the Real Estate market saw a total of six transactions publicly disclosed in the sector in the period in question.

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