Mergers and acquisitions (M&A) in Ukraine
According to InVenture estimates, the volume of announced and completed M&A transactions in Ukraine, including corporate agreements, VC transactions in the technology sector, as well as privatization transactions of state property sale by the end of 2024 amounted to $1.2 billion. Given the low publicity and transparency of transactions, we assume that the volume of the M&A market in Ukraine in 2024 was slightly higher; according to our estimates, it may amount to about $1.5 billion.
Due to the low transparency of transactions, it is difficult to estimate about 30% of completed transactions on the market, a significant number of which may exceed tens of millions of dollars. It is also obvious that dozens of transactions did not get on the media radar and were not subject to inspection by the AMCU.
In 2024, there were no mega-large transactions whose value exceeded $200 million (recall that in 2023, the value of the largest transaction was $500 million).
Consequently, compared to last year, the total volume of M&A agreements in 2024 in value terms decreased by 30%, however, given the number of transactions, we can state a certain revival of the investment market in 2024. The number of M&A transactions in Ukraine worth more than $0.5 million in 2024 compared to 2023 increased by more than 20% and amounted to 113 transactions (versus 91 in 2023).
Foreign investors accounted for 45% of the total number of investment transactions, and in value terms - 60%.
Sectoral structure of investment transactions in Ukraine in 2024
|
Sectors |
Number of transactions |
Transaction value, mln $ |
|
IT, Technology and Telecommunications |
41 |
496 |
|
Construction and Real Estate |
29 |
202 |
|
Agriculture |
11 |
129 |
|
Mining |
8 |
102 |
|
Others |
24 |
242 |
|
Total |
113 |
1170 |
As regards the sectoral structure of transactions, both in terms of deal volume and number, the IT, technology and telecommunications sector led the way, accounting for $496 million and 41 deals. In second place in terms of deal volume was the construction and real estate sectors with $202 million and 29 deals. The third in terms of investment activity was the agricultural sector, in which at least 11 significant deals worth $129 million were made. The extractive industry was also in the focus of investors' interests, with more than $100 million invested in 8 deals.
TOP 3 Largest M&A Deals in Ukraine in 2024
1. The largest deal of the year was the investment round to raise $200 million by Creatio (developer of a no-code platform for automating business processes and CRM) from Sapphire Ventures, StepStone Group, Volition Capital and Horizon Capital. Thanks to the new round of investments, Creatio's capitalization reached $1.2 billion.
2. In second place, the M&A agreement on the acquisition by the investment company NJJ Holding of the French billionaire Xavier Niel of the Ukrainian operator lifecell and fixed-line Internet provider Datagroup-Volia for $120 million.
3. Third place, for the privatization of 100% of the state-owned shares of the authorized capital of JSC United Mining and Chemical Company, controlled by NEQSOL Holding LLC Cemin Ukraine with a stake of $96 million.
The main drivers influencing the activity of the M&A market in 2024 were the following:
- legislative restrictions on the withdrawal of capital from Ukraine, which caused the corporate business segment to consider the possibility of acquiring assets within the country or reinvesting profits;
- a wave of relocation of enterprises from frontline regions, mainly from Kharkiv, Zaporizhia, Chernihiv, Sumy and Dnipropetrovsk regions, generated demand for the purchase of assets in the central and western regions of Ukraine;
- an increase in business problems due to a high credit burden, increased production costs, decreased consumer demand, difficulties with employee reservations, an increase in the tax burden and government
- pressure on business, etc. increased the number of distressed assets on the market;
- emigration of business owners abroad and the need to find a quick exit from assets;
- development of the defense sector and, as a result, demand for real estate for organizing production activities;
- political persecution of business owners;
- new privatization tenders for the sale of state property at attractive prices.
Forecast for the development of the investment and M&A market in 2025
As the results of the study showed, Ukrainian businesses and some foreign investors in 2024 continued to adapt to the war economy, launch new investment projects and conclude new agreements on the acquisition of assets.
We predict that investment rounds in the technology sector of the economy will have a growth trend in 2025, especially in projects whose products are aimed at the international market. Investments in the defense tech and artificial intelligence segments will increase even more significantly.
In the agricultural sector of Ukraine in 2025, no less activity is predicted than last year, in all likelihood, we will see large transactions.
Further migration of industrial enterprises to the central and western parts of Ukraine will determine the corresponding flow of capital and an increase in transactions in the industrial and logistics real estate sector.
The situation for many investors at the beginning of 2025 remains difficult to predict, geopolitical uncertainty regarding the conditions and timing of the end of the war creates both enormous opportunities for capital growth in the future through the acquisition of undervalued assets and the risks of possible losses.
The full InVenture report "Investment and M&A Market in Ukraine in 2024: Investments for Survival" is available by the link.
