2023 has been marked by unprecedented challenges and unexpected developments, according to Wolf Theiss Partner Ileana Glodeanu. From major events like the Hidroelectrica IPO to a surge in large-scale transactions and surprising sectoral activities, Glodeanu shares her thoughts on market conditions and emerging trends in Romania.
“This year has been a real whirlwind, surpassing even the complexities of 2022,” Glodeanu begins. “With major events like the Hidroelectrica IPO, which was Europe's largest, we've been kept on our toes. Despite some of these developments being in discussion for over a decade, their actualization in 2023 amidst a backdrop of war, rising interest rates, and inflation has been both challenging and pleasantly surprising,” she shares.
Looking at the M&A market in Romania, Glodeanu goes on to note that it has “been atypical, to say the least. We've seen a surge in large-scale transactions, which is unusual for Romania, where smaller deals are more common. The energy and technology sectors have been particularly active, though we've also navigated through a relatively effervescent period in healthcare and retail space as well,” she explains.
“It's been a year of contradictions and unexpected turns,” Glodeanu continues. “The volatility has been stark – we'd secure several mandates in a week, only to see clients withdraw or pause due to misaligned commercial terms the week thereafter. It's been a year where even seasoned lawyers found it hard to predict outcomes.” Interestingly, despite these challenges, she still says that Wolf Theiss has “seen better performance when compared to last year (which had been our best year ever, across CEE), with intense and tough negotiations characterizing most deals.”
Focusing on the most active sectors, Glodeanu points out that “energy was predictably active, continuing a trend from recent years. However, the tech sector brought surprises, as we continued to sign deals despite expecting a slowdown given the global capital markets situation.” Additionally, she reports that the “real estate sector and retail also defied expectations with significant transactions. Moreover, infrastructure and healthcare have remained strong and consistent,” she says.
Finally, Glodeanu reports an interesting trend emerging in Romania, one involving “high-net-worth individuals and family offices investing in private equity, though it's still in its early days compared to countries like the Czech Republic or Poland. We're also seeing succession planning in family businesses, with a growing need for structured approaches to M&A transactions,” she says.
“While it's tricky to predict what will come in 2024, given the unpredictability of this year, we anticipate continued activity in sectors like healthcare and infrastructure. The manufacturing sector also presents opportunities,” Glodeanu says, concluding that she also expects a “continued trend of complex and challenging negotiations, but with a market resilient enough to weather those challenges.”