Greece suffered a dry spell in mergers and acquisitions last year, hurt by the government's stand-off with international lenders, but prospects may improve this year if privatisations proceed and all goes well with its pending bailout review. The value of Greek mergers and acquisitions fell 39 percent to 1.4 billion euros ($1.52 billion) last year, dwarfed by some 584 billion euros of M&A deals in Europe, business consultancy PricewaterhouseCoopers said on Tuesday.
"It was unprecedented, we had two elections, one referendum, capital controls, a bank holiday and a third bailout. All this had an impact," said PwC executive director Costas Mitropoulos, who formerly headed Greece's privatisation agency. Activity should improve this year with three privatisations on the table and banks expected to continue divesting non-core operations.
Deals may rise fivefold and top 7 billion euros if there is no hiccup with Greece's compliance with bailout-prescribed reforms and privatisations move ahead, Mitropoulos said. Reflecting the trust deficit afflicting Greece in the eyes of investors, only one Greek company - OTE Telecom - managed to place a 4.37 percent international bond last year and raise 370 million euros.
Out of the 29 M&A transactions last year, about three quarters or 1.03 billion euros took place in the financial and pharmaceutical sectors. Among them, BC Partners bought Pharmathen for 470 million euros, Canada's Fairfax Holdings acquired Eurolife Insurance for 316 million and Kuwait's Al Ahli Bank took over Piraeus Bank's Egyptian network for 140 million euros. But privatisations stagnated, raising only 268 million euros for state coffers, well below a target of 2.2 billion euros.
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