Mergers and acquisitions (M&A) market in Ukraine 2020: all the hopes are laid on our investors

Mergers and acquisitions (M&A) market in Ukraine 2020: all the hopes are laid on our investors

InVenture presented a research of the mergers and acquisitions (M&A) market development in Ukraine in 2020: industry trends, the largest M&A transactions, comments and forecasts of experts

According to preliminary estimates of InVenture, the volume of announced and completed mergers and acquisitions (M&A) deals in Ukraine in 2020 amounted to $ 1.02 billion, which is 2 times less than in 2019, when the market was estimated at $ 2.1 billion. The number of M&A transactions also declined this year, from 76 M&A deals in 2019 to 64 M&As in 2020.

In terms of industry section, the largest number of M&A transactions is accounted for by the following sectors: construction and commercial real estate (17 transactions worth $ 278 million), logistics real estate and transport, mainly grain elevators (13 transactions worth $ 267 million), agriculture and agribusiness, mainly agricultural companies with crop production with a land bank under management (11 transactions worth $ 188 million), retail (3 transactions worth $ 98 million), IT and telecommunications, mainly gamedev studios and outsourcing companies (7 transactions worth $ 59 million), mining industry (5 transactions worth $ 59 million); other industries (finance, food processing, hotels and restaurants) accounted for 8 M&A transactions worth $ 68 million.

Table 1

M&A transactions in Ukraine in 2020 by industry, the number and the amount of transactions


Amount of M&A transactions, $ million

Number of M&A transactions

Construction and real estate



Transport and storage facilities









IT and telecommunications



Mining industry









* Source: Database InVenture M&A in Ukraine 2020

The Ukrainian market of mergers and acquisitions follows the global downward trend due to the consequences of the spread of the COVID-19 pandemic. Thus, according to S&P GLOBAL, the volume of global M&A transactions in Q3 2020 decreased by 53.2% compared to the same period last year.

The activity of foreign investors to acquire assets in Ukraine in 2020 has weakened, primarily due to the spread of the coronavirus epidemic on a global scale. Not only external economic factors, a change in investment priorities, uncertainty and a wait-and-see attitude of investors, but also restrictions on physical movements prevented. Many investors, InVenture had lengthy negotiations with to enter the Ukrainian market, postponed their plans for an indefinite period. Alexey Oleynikov, Managing Partner of InVenture, gives a direct speech from one of the largest US investors in the meat processing sector: “We still have concerns about looking the Ukraine, especially during the COVID-19 issues. I think this would be hard to execute with COVID-19 right now. "

Most of the transactions on the M&A market in Ukraine took place thanks to Ukrainian investors, among them, first of all, large diversified industrial and financial groups and well-known agricultural producers and agricultural traders.

The weak investment climate in Ukraine, according to many experts, continues to be the main obstacle to the growth of M&A transactions. According to an EBA study, in 2020, for the first time in five years of the survey, mistrust of the judiciary topped the anti-rating of barriers to foreign investment, with widespread corruption coming in second.

A resonant event in 2020, which had a negative impulse on investor sentiment, was the reduction in tariffs for solar power plants (SPP) and wind power plants (WPP) and the transition to an auction model for determining the tariff. As a result, more than 50 investors who have invested in alternative energy sources have filed international lawsuits against Ukraine for more than $ 30 million.

Largest M&A transactions in Ukraine in 2020

According to InVenture, the largest M&A transactions among private companies in Ukraine in 2020 were:

  • Purchase of 51% of shares in the TIS container terminal by DP World (UAE)

Transaction amount: $ 100-$ 130 million

  • Dragon Capital announced the purchase of 101 Tower office center (Sur Rose Holding Limited / Evrozhytlogroup LLC) from Stepan Chernovetskiy and Ihor Nikonov

Transaction amount: $ 110 million (deal is not closed)

  • Epicenter K group of companies purchased a part of the agricultural holding from Svarog West Group corporation through the purchase of the corporate rights of Khmelnytsk-Agro LLC

Transaction amount: $ 80- $ 90 million

  • Rewe International AG sold the Billa grocery supermarket chain (Billa-Ukraine FDI) to Novus (Consul Trade House UAB)

Transaction amount: $ 70 million (excluding accounts payable)

  • SCM of Rinat Akhmetov sold the Parallel gas station to Naftainvest 2020

Transaction amount: $ 30 million

  • Vitaly Khomutynnik sold 20% in JKX Oil & Gas to Bridgewater Holdings Corp (Seychelles).

Transaction amount: $ 20-30 million

  • Pavel Fuks left the shopping and entertainment center "Respublika", selling his 25% stake to the organizations of Dmitry Firtash

Transaction amount: $ 20-25 million

  • Glencore Agriculture Limited (Renaisco B.V.) completed acquisition of EverI LLC terminal from Orexim Group

Transaction amount: $ 20-25 million

  • Vadim Novinsky's Regal Petroleum Plc bought out a hydrocarbon production company Arkona Gas-Energiya LLC from private investors

Transaction amount: $ 8.6 million

  • Arab Investment Fund Agartha Fund L.P. intends to buy the agricultural holding "Kaskad-Agro" from Vitaliy Khomutynnik

Transaction amount: unknown

  • Risoil S.A. (Switzerland) acquired the company for transshipment and storage of bulk cargo "Bokonti Ukraine" LLC

Transaction amount: unknown

  • Sibelco Group (Belgium) has acquired 2 Ukrainian clay-extracting companies "Euromineral" LLC and "Kurdyumov plant of acid-resistant products" PJSC

Transaction amount: unknown

  • DCH of Alexander Yaroslavsky acquired Bank "Credit-Dnepr" from Victor Pinchuk’s EastOne

Transaction amount: unknown

  • Nikolay Zlochevsky's Alliance ESSET Management LLC bought a controlling stake in Gazvydobuvannya Industrial Company LLC

Transaction amount: unknown

Due to the low transparency of the M&A market in Ukraine, InVenture does not guarantee the complete accuracy of the information provided, and in particular, inaccuracies are allowed regarding individual M&A transactions. The value of some transactions is based on expert and comparative valuation methods and may not include accounts payable, which in turn may result from an overvaluation of the transaction.

The largest M&A transactions in Ukraine with state participation in 2020 were:

  • Hotel "Dnipro" was sold to "Smartland" LLC (Alexander Kokhanovsky)

Transaction amount: $ 41 million

  • "Bastion-group" acquired "Kyivpasservis" JSC

Transaction amount: $ 9.4 million

  • Allrise Capital Inc acquired Chernomorets stadium

Transaction amount: $ 7.2 million

Among the large investment transactions with the participation of the state, one can include the transfer of the Kherson seaport and Olvia port to the concession, including investment obligations in the amount of $ 138 million.

The largest venture capital deals and M&A in the IT sector of Ukraine in 2020

Ukraine remains an integral part of the global technology and innovation market and a participant in investment transactions. The volume of venture capital investments and M&A transactions among Ukrainian IT companies and startups also significantly decreased in 2020 and amounted to $ 167 million, against $ 658 million in 2019. At the same time, the number of transactions increased from 25 transactions in 2019 to 46 in 2020.

Local investors remain active investors in Ukrainian startups, including ICU Ventures, Horizon Capital, TA Ventures, Genesis Investments, SMRK VC Fund, Fedoriv Group, SMRK VC Fund, Quarter Partners, Pragmatech and a number of angels.

  • Restream service, created by Ukrainians from Vinnytsia and incorporated in the USA, during round A attracted investments from venture funds Sapphire Ventures and Insight Partner

Transaction amount: $ 50 million

  • Swedish video game creator Embracer Group has acquired Ukrainian studio 4A Games, which worked on the Metro series of post-apocalyptic shooters

Transaction amount: $ 35 million

  • The Ukrainian EdTech-marketplace for learning foreign languages ​​Preply has closed another investment round with the participation of a group of international venture funds and private investors, including Hoxton Ventures, Point Nine Capital, All Iron Ventures, The Family, EduCapital, Diligent Capital

Transaction amount: $ 10 million

  • Ukrainian Allset restaurant reservations service raised investments from EBRD, Andreessen Horowitz, Greycroft, SMRK VC Fund and Inovo Venture Partners

Transaction amount: $ 8.25 million

  • Ukrainian platform DMarket, working on monetizing items in games, has attracted investments from Almaz Capital and Xsolla

Transaction amount: $ 7.2 million

  • Ukrainian startup Reface, replacing the face in the video, attracted investments from TQ Ventures, Andreessen Horowitz and a number of angels

Transaction amount: $ 5.5 million

  • Food delivery service ua attracted investments from its own shareholder Chernovetskyi Investment Group (CIG)

Transaction amount: $ 5.5 million

  • American Cprime acquires Ukrainian IT outsourcer Archer Software

Transaction amount: $ 5-8 million

  • Ukrainian AllRight, an online English school for children with real teachers and an AI teacher, has attracted investments from Genesis Investments, TMT Investments, TerraVC, Flashpoint and a number of angels

Transaction amount: $ 5 million

  • Ukrainian drug discovery and delivery service Liki24 raised funds from Horizon Capital, Genesis Investments and TA Ventures to expand the business and enter the European market

Transaction amount: $ 5 million

  • Ukrainian-founded online platform for long-term rental housing Rentberry attracted crowdfunding investments from Angel Investors Marlborough and a number of angels

Transaction amount: $ 4.5 million

  • Ukrainian developer of advertising targeting platform Influ2 has attracted investments from venture capitalists: One Way Ventures, VentureFriends, as well as angels Murat Abdrakhmanov and Peter Harrison

Transaction amount: $ 3.4 million

  • Lviv game development studio Hologryph attracted investments from the American publisher TinyBuild by giving a majority stake

Transaction amount: $ 3 million

  • IntellectoKids, a developer of educational apps for children, has attracted Series A investments from Allrise Capital, Genesis Investments and other investors.

Transaction amount: $ 3 million


What will the M&A market in Ukraine in 2020 be remembered for?

Opinions of investment bankers and lawyers in the field of corporate finance and support of M&A transactions in Ukraine.


Alexey Oleynikov, Managing partner at InVenture

Since in 2020 companies around the world, including Ukraine, were busy reformatting their activities and adapting to the conditions of the pandemic, as well as reassessing their investment plans, it is likely that international investors will return to the postponed expansion plans in 2021, so a recovery of the activity in the M&A market can be expected in the near future.

As for Ukraine, investor activity in the domestic M&A market will remain relatively low in 2021, as buyers and sellers will still focus on preserving their business and minimizing the impact of the pandemic.

The purchase of distressed assets by large industrial and financial groups will remain relevant.

Among the sectoral priorities in 2021, the demand for assets in agriculture, pharmaceuticals, food processing, logistics, port and port infrastructure, and the IT sector will remain.

Large deals are also possible in the commercial real estate market, with sales likely to take place at distressed prices.

As for the agricultural sector, the consolidation and enlargement of individual market players in the crop production segment will continue through the absorption of small enterprises. A successful 2020 will add confidence to farmers for new purchases due to favorable market conditions, rising prices for cereals and oilseeds. However, it is expected that some agrarians of the southern and central regions of Ukraine, due to limited precipitation, on the contrary, will be forced to sell their business.

The beginning of the stage of creating public-private partnerships and the continuation of the SPFU privatization program may somewhat revive the market.

In 2021, InVenture already has several buy-side mandates from Ukrainian and foreign investors to invest in crop farming companies with a land bank, commercial real estate within Kyiv, logistics complexes and grain elevators, a number of areas in the food industry (oil extraction plants, water production, dairies, canneries, snack production, etc.).

High macroeconomic risks remain in Ukraine for 2021 and this will restrain investment activity. The default on government borrowing will be the biggest threat to the investment climate. There is still a risk of failure to reach an agreement with the IMF on the allocation of new tranches to cover the budget deficit.

The expected re-lockdown in January 2021 will also have a negative impact on business activity. Although, many investors who have already entered the Ukrainian market will most likely not change their investment plans.

At the same time, an effective fight against corruption can have the most beneficial effect on the investment climate in a country. Restarting the judiciary and appointing reputable reformers to key positions could be another important factor.

Yuriy Astakhov, Director of Investment Banking Department, Dragon Capital

The knockdown, the global market was sent to in spring 2020, on one hand, forced a number of companies to revise investment budgets towards reducing or slowing down the rate of investment development, on the other hand, it gave an excellent reason for management to optimize the cost part. Like any crisis, this one has become an excellent reason for companies that have not lost their composure to “cleanse the body”.

By the summer, when the situation began to stabilize and it became clear that many of the covid risks were either exaggerated or could be partially mitigated, a number of companies returned to negotiations. In particular, this applies to the agricultural sector of Ukraine. One of the obvious advantages of negotiations on Zoom is increased efficiency and focus on results. We have an example of several deals we did that started in March and came to a logical conclusion this autumn.

The situation in terms of attracting external investors still leaves much to be desired – in general, to the already negative news background, the absence of tangible reforms and difficulties in negotiations with the IMF, there were added logistical problems associated with the complexity of flights and the need to go through quarantine for Western European investors after visiting Ukraine ...

Also, the market was hit hard by a series of defaults on agricultural producers' forward contracts. It can already be stated that the rules of the game in the next season will change and not in the direction of increasing market efficiency and reducing transaction costs.

Anna Babich, Partner, Head of corporate practice / M&A at Aequo

A year ago, it was hard to imagine that one catastrophic event could suddenly stop the global M&A market. The forecast was optimistic, since starting from 2015 the number and volume of transactions in Ukraine has been growing steadily, reaching 80 transactions for a total of 1.19 billion euros in 2019. This figure is 12% more than in 2018 and is the highest since 2013. However, in spring, we already saw how the coronavirus pandemic almost completely stopped the M&A market. Since February 2020, there has been a rapid decline in the number of transactions in Ukraine. During the first lockdown, investor activity was at a low level.

However, summing up the results of 2020, it is clear that it was not for long. Starting in the third quarter, M&A activity began to recover. In some industries, it has even surpassed expectations by far – the transition of the entire world to online mode marked the beginning of a huge change in IT solutions for distance working and distance entertainment, which now looks like a new kind of unicorns, born of changed demand. High activity is noticeable in the CRM, BPM, e-commerce, fintech, classifieds, marketplaces, gamedev segment. The second important industry that will grow is biotechnology and healthcare, including private medicine and diagnostics.

We must also admit that we have entered the era of virtual bargaining. After the first shock, the business unexpectedly came to the conclusion that deals can be made without personal meetings. It takes some time to realize that an agreement can be concluded without live interaction of people, presentation of company management to potential buyers and meetings with shareholders and consultants. Of course, all these ceremonies and steps build trust between the parties to the agreement and add confidence in its success. The answer to the question of how to build trust in online negotiations has not yet been found, but the whole world is already looking for new tools to replace trust building in a virtual way.

Sergey Chuykin, Managing Director of Investment Banking Department, Concorde Capital

2020 will primarily be remembered for the COVID-19 coronavirus pandemic that overtook the whole world, which, of course, had a significant effect on the M&A market. If over the past few years we have indeed observed a slight increase in M&A activity in Ukraine, then in 2020 we again see a sharp decline in both the number and the amount of transactions. According to preliminary estimates, the market dropped 3 times in comparison with last year. We still hardly see new foreign investors. You can recall the deal with Sidelco for the purchase of two Ukrainian clay mining companies – that's probably all. At the same time, another large foreign player left Ukraine – the Rewe International AG group sold the Billa grocery supermarket chain. The market continues to be dominated by domestic M&A transactions, mainly involving local players only. Amid the uncertainty surrounding the coronavirus pandemic, I do not expect a significant increase and a large number of deals next year.

Alexey Demyanenko, Partner, Co-Head of corporate practice and M&A Asters

We did not notice a significant decline in M&A activity in 2020. The number of deals assisted was high, which made it possible to overfulfill the practice plan.

The greatest activity was concentrated in the IT, advanced technology, fintech, agriculture, commercial real estate and energy sectors. The average receipt amount of transactions that we observed was in the range of $ 5-15 million, which did not exclude individual transactions with a large investment volume. A number of projects with receipt amount from 50-100 million dollars are in the stage of active search for a strategic investor.

Traditionally, judging by quantitative criteria, 70-80% of projects and acquisitions were carried out by local investors. Through foreign investors, we have supported high profile transactions from the United States, including software development and manufacturing projects. One of the significant projects was based on the concept of localizing production in Ukraine for the further expansion of operations to European markets. We saw the importance for the country's economy as a whole in such a project, allowing Ukraine to play the role of a central platform between the United States, Europe and, potentially, Asian countries.

We also see and expect further increased interest in export-oriented businesses that generate foreign exchange earnings, which allows us to manage the risks of hryvnia devaluation. Within its perimeter, we assign the main role to food production and export. With the development of insurance medicine and the arrival of new global insurance companies on the market, the activity and M&A projects in private medicine will increase.

Ilya Segeda, Leader of M&A Advisory Services at KPMG in Ukraine

The uncertainty of the COVID-19 situation slowed down the progress of M&A transactions, which were to be closed in 1 half of 2020, and led to a decrease in their number and value. A number of M&A transactions that were planned or already started earlier in 2020 were put on hold as buyers and sellers had to focus on surviving the pandemic and not losing their business. There is no doubt that due to the COVID-19 pandemic, investor plans are being revised. Some of them will redirect their resources to ensure that their companies are best equipped to prepare for the new reality that will follow the recession. Others take a more cautious approach by looking at how an investee adapts to operating model changes in the industry before entering into a deal. Some players will conduct business "as always" based either on their long-term vision of the investment / sector or on the overall investment strategy. There will also be adventurers – hunters and those who will be shot – those with a strong balance, a high risk appetite, or a sense that now is the best time to enter a new market.

The probability and duration of M&A transactions today depend on both global factors and purely technical reasons. On one hand, the main challenge for foreign investors is the lack of travel opportunities. Despite technological advances and the ease of telecommuting in the ZTS (Zoom-Teams-Skype) era, face-to-face contact and eye-to-eye contact are essential for quick conversations. After all, the negotiators are not used to relying solely on financial and economic indicators.

A visit to the takeover object is an important step for an investor and often helps to discern those problems that are not obvious when studying the documentation remotely.

In any case, today both parties to M&A transactions need more time to reconcile and complete transactions.

On the other hand, we may see an increase in the number of clauses in stock purchase agreements dealing with significant negative changes (MCAs), despite a number of problems caused by COVID-19. These MCA clauses are not new, but tend to be used more often during times of uncertainty. They provide a mechanism for each party to opt out of a deal in case of a significant deterioration in the company's condition or pricing conditions, which may be associated with a specific event, or in case of a pandemic.

In particular, we should expect more widespread use of provisions regarding additional payments based on future earn-out profits, as well as other forms of payment deferral mechanisms for M&A transactions. Such requirements should help buyers balance the uncertainty and difficulty of forecasting future cash flows with the general reluctance of unaffected sellers to accept price cuts due to COVID-19.

Andrey Martynyuk, Business Development Director at OMP

This year will be remembered for many issues. It made its own adjustments to all aspects of business relations ... Of course, this was reflected in the volume of investments, mergers and acquisitions for the current year. To our regret, this year not all potential M&A transactions took place, some were stuck at the stage of approval, some were postponed to next year or went on the back burner. I would not like to focus on the reasons that we all know very well, but complaining is not our approach, we always remain optimistic and this year we assisted a number of high-profile transactions that hit the TOP M&A ratings for 2020.

Everything is complicated concerning foreign investments this year they have completely ceased to "believe" in the transparency of our state system with a greater share of mistrust in the judicial system, a high level of corruption and a pessimistic forecast of political instability. Under the current conditions, the "reformers" do not yet inspire great confidence not only among foreign investors, but also stop the flows of domestic investment. Of course, it should be noted that business activity has quieted down this year, because the very concept of work has changed, it took a lot of time to reformat the work of employees and adapt to the conditions of the pandemic, the world business incurred significant expenses for "restructuring".

New trends are spawning new business players who have adapted faster than competitors.

It should be noted that large players in the M&A market were cautious about large deals, they devoted more time to small non-public mergers, this is very noticeable given the massive concentrations that we assisted when filing with the AMCU.

We really expect that next year activity will increase due to accumulated plans that were not implemented in 2020, including due to the recession of the COVID-19 pandemic. We, as lawyers who historically accompany the agricultural sector, see significant prospects next year with the possible opening of a land market. We see significant activity among investment funds, private investors move in this direction through certain options for a set of land assets. This gives us confidence that next year will be more optimistic.

Sergey Goncharevich, Managing Partner, Capital Times

In 2020, much has happened and a lot has changed. We are experiencing the first global pandemic and we do not know where we will go yet. For Capital Times, this is the third crisis, and for me personally, as a financier, it is the fifth. This year we have closed 3 deals, the most significant of which is the deal with Glencore.

The first quarter of 2020 looked much worse compared to the same period in 2019. However, in the following quarters the situation leveled off, the numbers became better, and we closed the third and fourth quarters almost at the level of 2019.

Sector statistics confirmed the trend of last year: the most active sector is TMT (IT sector), in which there were almost 2 times more deals than in agro. We can also highlight the real estate and food industry sectors, which will be very active in the future.

And for the M&A market of Ukraine, 2021 will be no less difficult than the current year: we do not understand where we are going with COVID-19.

Capital Times enters 2021 with six IT projects, five industrial projects, three AGRO projects and three in the food industry.

We also predict that international financial institutions will show high activity, actively providing money for enterprises, their growth and development.

However, it's worth noting that the first half of 2021 will be pretty challenging. The buyer's market is a good time to shop.

Tatiana Dovgan, Partner of corporate practice / M&A at CMS Cameron McKenna Nabarro Olswang

Despite the undeniable impact of the Covid-19 pandemic on the M&A market in the world and in Ukraine, our team remembered 2020 as a rather busy year.

The pandemic led to a significant decline in activity in the M&A market of Ukraine in the first quarter of the year, which was in line with the dynamics of the global market. Most deals during that period were suspended or postponed until "better times" due to uncertainty and a shift in priorities. At the same time, the period of temporary calm in Ukraine (in comparison, for example, with the European M&A market) lasted for a relatively short time, which is confirmed by our observations, as well as the observations of our colleagues in the market. From mid-April to early May, the M&A market began to recover, and just at the turn of the six months, the most significant deals of 2020 took place, including (from public deals) the purchase of a stake in the TIS container terminal by DP World – which our team worked on. Also, all of our deals that were paused in the first quarter were eventually signed and / or completed. By the end of 2020, we expect to sign several more important deals for Ukraine with the participation of foreign investors.

Despite the general dominance of domestic M&A transactions with the participation of local players in 2020, we saw a healthy interest in M&A in Ukraine from foreign investors (both those who are already on the market and new investors). Infrastructure, agriculture, technology, media and telecommunications and industry remained the most active, while the number of deals in the renewable energy sector dropped significantly for obvious reasons. In the coming year, we expect activity in the sectors that have shown the greatest resistance to quarantine processes or are the most promising in our opinion, including TMT, pharmaceuticals, medicine and biotechnology, infrastructure, industry and financial services.

The overall picture that we see at the end of 2020 from our side, together with forecasts and existing opportunities for investors, give us grounds for “cautious optimism” regarding the M&A market in Ukraine in the coming year.

Analytics and databases on M&A transactions in Ukraine

  • InVenture database "M&A transactions in Ukraine: main mergers and acquisitions in Ukraine for 20018-2020"
  • InVenture database "Venture investments, startups, M&A transactions in the IT sector of Ukraine for 2018-2020"

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