Activity in the Ukrainian M&A market in the first nine months of this year remained almost at the same level as in the same period of the previous year: the number of deals decreased from 37 to 36, but the total value increased by 2.9% to $643 million. This is evidenced by a new report from the audit and consulting company KPMG Ukraine.
In turn, the level of transparency of company acquisition deals has noticeably decreased: only 47% of deals in January-September had a disclosed value, while last year this figure was 62%.
The average transaction value increased from $27 million to $38 million, indicating a trend towards larger and more valuable deals in the Ukrainian M&A market. As noted by KPMG, this indicates a gradual recovery of the market compared to 2022 and 2023.
Investments abroad and from abroad
Overseas transactions accounted for 28% of the total transaction volume over the three quarters, and Ukrainian companies continue to diversify investments and expand their presence in international markets.
Key deals included the acquisition of IT company Intellias in the UK and entry into the North American market, as well as large acquisitions by Farmak in the UK and Poland. The trend towards outward investment is expected to continue as Ukrainian companies seek new opportunities outside the domestic market.
Although the number of incoming M&A deals has slightly decreased (10 vs. 13 in January-September 2023), their total value has increased to $473 million, compared to $278 million last year.
Six of these ten deals were concluded in the innovation and technology sectors, where investors from North America and Europe continue to play a leading role.
“Flexibility of working conditions, in particular the ability to work remotely, has become a key factor in the resilience of the IT sector, and recent transactions confirm the continued global confidence in the potential of the Ukrainian IT industry,” KPMG commented.
Large-scale privatization
At the same time, among intra-Ukrainian M&A deals, the value was disclosed only in a quarter of cases, and that was largely due to the privatization auctions held on the Prozorro.Sales platform.
The Cabinet of Ministers approved the terms and starting price of the sale of the aerated concrete manufacturer Aerok
Thus, among the successful auctions in the real estate sector, the privatization of the hotels "Kazatsky" and "Ukraine" on Maidan Nezalezhnosti in Kyiv is mentioned, which were sold for 400 million and 2.5 billion hryvnias, respectively.
In addition, agriculture remains key for investment in Ukraine, as evidenced by significant acquisitions against the backdrop of land reform. It is noted that after successful transactions that brought high prices in October 2024, the State Property Fund plans to auction another 100 thousand hectares of land in 20 regions by the end of the year.
In addition, the auction for the sale of the state titanium United Mining and Chemical Company was completed, the winner of which was Cemin Ukraine, a subsidiary of NEQSOL Holding, with an offer of UAH 3.9 billion.
KPMG believes that the successful sale of one of the world's largest titanium producers could be the beginning of broader privatization processes in the metallurgical and mining sectors of Ukraine, given the government's recent statements about the potential for privatization of such enterprises as the Demurinsky Mining and Processing Plant and VSMPO Titan Ukraine.
Investments in the Defense Industry
They also note the continued attraction of investments by Ukrainian companies in the military technology sector – both from the government and international private investors.
Foreign defense companies are also increasing their presence in the Ukrainian market. In particular, the German Rheinmetall, after creating a joint venture for the production of ammunition, opened the first workshop in Ukraine for the repair and production of armored vehicles, expanding its production presence and deepening cooperation with the state-owned Ukroboronprom.
Other large defense technology companies, such as KNDS and Roshel, have also recently announced plans to increase investments and open production facilities in Ukraine. According to KPMG, these projects not only strengthen Ukraine's defense capability, but also provide an economic boost through production supply chains, new jobs, and access of Ukrainian defense products to international markets.
The largest telecom deal
We also recall that from January to September, the process of completing the deal to acquire the Ukrainian mobile operator lifecell, which belonged to the Turkish Turkcell, by the French company DVL Telecom, which belongs to the NJJ group, continued.
The agreement itself was signed only three days before 2024. Its closure was delayed until September 10 mainly due to the lengthy approval process by the Antimonopoly Committee. NJJ paid $524.3 million for lifecell, but $435 million for this was taken as a loan from the IFC and the EBRD. This acquisition became the largest foreign investment in Ukraine since the beginning of the full-scale invasion of the Russian Federation.
In addition, DVL Telecom bought the Ukrainian Internet provider Datagroup-Volya. On September 10, the investment company Horizon Capital, which owned this asset, announced the closure of this deal. The new owner of Datagroup-Volya and lifecell decided to merge these two companies. Mikhail Shelemba, who headed the first of them, became the CEO of the combined platform.
