M&A rise confirms sentiment shift
“Greece’s return to the markets, or the recovery of confidence” could have been the title of the survey of company mergers and acquisitions in Greece last year, said Kyriakos Andreou, partner and chief analyst at PricewaterhouseCoopers Greece at the start of the annual report’s presentation on Tuesday in Athens.
Andreou added that if this course continues for the next two or three years, returns on investments will be no different to those offered by mature markets. “Greece,” Andreou said, “is gradually creating its own narrative, resulting in the restoration of market confidence. This is reflected in the yields of the Greek 10-year bond, which have dropped to the lowest level since 2006.”
Therefore a record number of mergers and acquisitions (M&As) were recorded in the local market last year: For the first time in the last decade, deals exceeded 10 billion euros; a key factor in this effect has been the corporate bond issues, mainly in the second half of 2019 – i.e. after the change in government – adding up to more than 5 billion euros for the whole of 2019.
PwC data showed that there were 12 bonds issued last year by Greek enterprises, of which nine were in the latter half of 2019, adding up to 3.5 billion euros. Of the three that took place in the first half, amounting to 1.5 billion euros, 1.3 billion concerned the Coca-Cola HBC issue.
Transactions involving corporate holdings rose to 4.3 billion euros in 2019 from 3.7 billion in 2018, though this time forced divestments have been overtaken by investments by choice: Investments last year amounted to 2.9 billion, against 1.9 billion in 2018, while forced divestments amounted to 1.2 billion, down from 1.8 billion euros in 2018.
“After a long period when divestments of systemic banks constituted the lion’s share of M&As, in 2019 a balanced portfolio was recorded with activity in a larger spectrum of sectors,” commented Thanassis Panopoulos, partner and head of the M&S department of PwC Greece: “This healthy balance along with the increase in incoming investments signals the start of a positive period,” he added.
