Romanian M&A market evolution during the first quarter of 2025

During the first three months of 2025, the Romanian mergers and acquisitions (M&A) market recorded 51 transactions, with an estimated combined value of USD 1.0bn  reflecting a 25% decline in the number of deals (68) and 29% fall in the value (USD 1.4bn) of M&A compared to Q4 2024, EY report says.   The lower level of deal-making was largely due to a slow start to the year with January 2025 recording the lowest number of deals (10) since September 2023 (12), while activity was more in line with the 2024 average monthly run-rate in February and March 2025. The lower estimated value of Romanian M&A in Q1 2025 was impacted by the record share of transactions with undisclosed deal value (84%).   The largest disclosed deal of Q1 2025 was the acquisition of P3 Group’s logistics portfolio by Netherlands-based CTP, Europe’s largest publicly listed developer of industrial and logistics properties, for USD 280m. The buyer registered another significant transaction in the previous year, when it acquired 5 light-industrial parks from Globalworth Real Estate Investments’ wholly-owned logistics portfolio, for approximately USD 184m. The second-largest disclosed transaction by value during this period was Solida Capital’s acquisition of the Victoria Center Office Building from Macquarie Group for USD 31.7m, where EY provided financial and tax due diligence services to the buyer.   While strategic investors remained the dominant players in Romanian M&A during Q1 2025, accounting for 80% of transactions, financial sponsors accounted for a record 16% share of deal volume, driven mainly by foreign private equity funds investing across numerous sectors, including healthcare, renewables, real estate and oil & gas. Time will tell if Q1 2025 marked the start of a structural rebalancing of the Romanian M&A in line with other CEE markets, where financial investors account for closer to 20-25% of deals.   Domestic deal-making fell from 51% of announced deals in Q4 2024 to 43% in Q1 2025, mainly due to an increase in foreign acquisitions by Romanian investors. The share of inbound deals (43%) remained fairly stable quarter-on-quarter (QoQ), with the United States retaining first place with four deals, followed by the United Kingdom with three, which marked a return to its long-term position as the second most active investor in Romania following a two-year lull in activity post-Brexit. Germany and Poland jointly occupied third place with two deals each.   Romanian deal-makers recorded five outbound transactions (10% share) during this quarter, reenforcing the confidence of domestic investors for overseas targets seen during 2024. Three outbound transactions stood out in Q1 2025: Morphosis Capital’s minority investment in Endurosat, a leading European provider of high-end satellites and space services, where EY provided financial and tax due diligence services to Morphosis; BitDefender’s acquisition of BitShield Malaysia and Med Life’s acquisition of Moldova-based All Clinic.   The Real Estate, Hospitality & Construction sector ranked first in volume in the first quarter with nine deals, followed by the Health, Technology and Advanced Manufacturing Sectors with six deals each. The Consumer Products & Retail and Power & Utilities sectors followed with five transactions each. The Mobility sector recorded four transactions, including the acquisition of several luxury automotive dealership (Ferrari, Aston Martin, Dallara and Morgan) businesses by Canada’s Holland Automotive Group, where EY provided vendor due diligence services to the seller.   While the much-anticipated sale of Regina Maria Group by MidEuropa was not announced until 1 April, it would be remise not to acknowledge this hugely significant inbound transaction in the Romanian healthcare sector. Although the official press-releases did not disclose the deal value, various news sources estimated that CVC backed Mehilainen of Finland agreed to pay over USD 1.4bn, which would make this one of the largest deals ever recorded in Romanian M&A. This transaction highlights the confidence of foreign investors in Romania as an investment destination.   Notwithstanding that Q1 2025 recorded a QoQ decline in both the volume and value of Romanian M&A, it also saw the highest share of financial sponsor backed transactions on record, stable levels of inbound activity, and the growing confidence of Romanian deal-makers to invest overseas.