Russian M&A Market Trends and Outlook for 2024
The Russian M&A market has seen a turbulent year in 2023, with a decrease in both the number and average value of transactions. This decline has been attributed to high inflation rates and currency fluctuations, which have impacted the global M&A market as well.
Despite these challenges, the Russian M&A market is showing signs of recovery towards the end of 2023 and the beginning of 2024. There is a growing number of domestic transactions among local players and cross-border transactions involving new foreign investors from jurisdictions other than the EU and US.
In 2024, it is expected that the number of M&A transactions in the Russian market will continue to grow, especially in sectors such as technology, agriculture, construction, and development. Key trends in the market include secondary sales of assets, reorganization and restructuring of holdings, increased interest from Eastern and Asian investors, consolidation of business groups, and the exodus of foreign companies.
Transaction structures in the Russian M&A market vary depending on the parties involved. Transactions with exiting foreign companies are driven by sanctions pressure and have simplified terms, while transactions between local players follow market-standard M&A terms.
Legal and regulatory issues play a significant role in M&A transactions in Russia, with counter sanctions regulations impacting transactions with foreign companies. Transactions with assets from “unfriendly” countries face increased regulatory scrutiny, while transactions with assets from other countries have clearer requirements.
Despite these challenges, the M&A outlook in Russia remains positive for investors who are willing to navigate the regulatory landscape. The trend towards localization of production and the exit of international corporations from Russian assets present opportunities for investors who can adapt to the changing market conditions.
Overall, the Russian M&A market is poised for growth in 2024, with opportunities for both domestic and foreign investors to participate in transactions across various sectors.
