Deal landscape: What’s next in the Baltics in 2018?

4.10.2017

“Are Baltic companies too small ever to be sold?” asked Žygimantas Mauricas, Chief Economist at Luminor. “It seems the Baltic tiger is sleeping and some might even call it a Baltic kitty. But if you look at the data, Baltic companies are not too small to be sold.”

The top economist showed some illustrative data showing that economic sentiment is close to post-crisis highs but the Baltics, although improving, are no longer European champion. “Looking at the numbers, they are not the most optimistic – GDP figures show the Baltics growing somewhat slower than the rest of Europe. Investment is at historically low levels. But this does not mean companies cannot be sold. This is a time when we have to work harder than before: our region is not as attractive, so you have to offer something more”, he added.

Participants in the panel discussion “What’s next in the Baltics?” did not feel at ease sharing their insights on the Baltic market, though their examples did spark some optimism. According to Tamasz Szalai, a regional private equity investor at CEE Equity Advisor Investment Director, “The Baltics are not a small market as such. True, companies here are small and it is not easy for funds to invest. But it is an exciting market with a lot of potential.”

Panellists also touched on one of the latest market trends – China and Japan are still heavily investing in the EU and the USA. For example, Food Union group, an international group of dairy and ice cream-producing companies, has received a combined EUR 214 million investment from PAG, one of Asia’s largest private equity firms, and Meridian Capital, an existing investor.

According to Normunds Stanēvičs, CFO at Food Union Europe, there is no big secret to attracting Chinese investment – one just has to respect local market demands and make fast decisions: “If you can, always go local, local people want to eat local food and they want to recognize local brands which they remember from their childhood” and not waste time in long deliberations. “Buy quick, integrate quick and sell quick – there is no more time for sitting in long meetings for hours, or for flying around Europe – those times are gone”.

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