In the Baltic States M&A market in the road construction has been practically inactive since 2010 until the beginning of 2017 - only 2 transactions were announced during this period, according to Prudentia M&A Folio Industry Expertise. Whereas in Europe 219 M&A deals were announced during the same period, which most likely is due to post-crisis financial consequences and also due to the opportunity to expand market position with relatively cheaper acquisitions.
The distribution of the road construction sector vary widely across the Baltics, and sales figures of road construction companies highlight the differences in company size and most likely their influence. The realization of the Rail Baltica project is inevitably linked to the entry of strong international competitors into the Baltics, therefore market player consolidation is a logical scenario for the future market development. This is the first year when the tendency of Baltic road construction companies to strengthen their market positions via M&A has been observed - during first 8 months of 2017 there were 4 deals announced, of which 3 has been realized. As one of the most significant M&A deal in the Baltics during the analyzed period is the purchase of 68.75% stake in Saldus ceļinieks by Eurovia (part of Vinci group), a French transport infrastructure construction and urban development company, thus Saldus ceļinieks, considering strategic investor's resources and long-term experience, plans to significantly expand their presence in the Baltics. It is possible, that M&A's in the Baltic road construction sector will continue till the end of this year.
Speaking of the Baltic M&A market as a whole, the M&A activity in the first 8 months of 2017 has been by 20% higher than same period last year, thus we can with high confidence predict that this year is going to end with an essential increase of the deal count.
It is possible to read the full Prudentia M&A Folio here: Prudentia M&A Folio (293.35 KB)