In Dienas Bizness, Sorainen managing partner Eva Berlaus discusses how Baltic entrepreneurs are increasingly expanding beyond their home markets through international M&A and acquisitions, driven by accumulated capital, their growing experience, and smaller domestic economies’ need for continued growth.
In recent years, Baltic entrepreneurs have significantly increased their participation in international M&A transactions, with a strong focus on the Nordic countries and Eastern Europe, signalling a strategic push for regional expansion.
Baltic companies, once mainly acquisition targets, are now emerging as active buyers. Eva Berlaus, managing partner at Sorainen, highlights the fact that their accumulated capital and experience are now empowering these companies to pursue international M&A. The relatively small domestic markets further drive their need to expand abroad for continued growth.
What are the main factors driving Baltic entrepreneurs’ activity in international M&A transactions?
One of the main factors is that many Baltic companies have now scaled and developed domestically to a sufficient degree to undertake such transactions. For instance, Latvia’s market is relatively small, so to continue long-term growth, companies can either diversify into new areas or look beyond the country’s borders. The client base and market size in Latvia are limited, so the first step is often expansion into the other Baltic countries, namely, Lithuania and Estonia, which are nearby and relatively familiar. However, once companies become leaders even in these neighbouring Baltic markets, they face limits to further regional growth, making expansion into non-Baltic international markets the logical next choice.
Another important factor is geopolitics and entrepreneurs’ desire to diversify their assets. This does not mean that companies are leaving the Baltics – we have not observed such a trend, at least not to any significant extent. Rather, it means that in addition to assets in the Baltics, companies are acquiring assets in other countries in order to diversify risks and facilitate entry into new markets, for example, by acquiring production capacity closer to target development markets. In fintech and alternative lending, expansion abroad is often simply part of the business model. Such companies frequently enter markets where these services are not yet sufficiently developed. For example, recently, fintech companies have been expanding very actively in Africa and the Middle East, as these regions are still at a relatively early stage of development and offer substantial opportunities. These markets are often riskier, but they also provide significantly faster growth potential.
Which would you highlight as the most notable M&A transactions in Latvia in recent years?
In May last year, ION Analytics compiled a list of the 10 largest acquisitions by Baltic companies outside the Baltics since 2020. Two transactions from Latvia were included in this list: Mogo Finance’s acquisition of the Moldovan-based Sebo Credit in 2020, and 4Finance Holding’s acquisition of the Philippine-based Online Loans Pilipinas Financing in 2022.
Six out of ten transactions on this list were carried out by Lithuanian companies. How would you explain this? Can we say that Lithuanians are significantly more active in this field?
Yes, and there are several reasons for this. First, the Lithuanian market is slightly larger than those in Latvia and Estonia, and the average company size is often bigger in Lithuania, meaning there are more companies there that have already reached the scale and level of development required to execute such transactions. Second, business mentality also plays a role: Lithuanian entrepreneurs are often more aggressive in their growth strategies than their Latvian or Estonian counterparts. Looking at overall activity, in 2024, Baltic companies completed 18 outbound deals worth about EUR 120 million. In 2025, this rose to 34 deals totalling EUR 174 million. On the global scale, this is not a huge volume, but it is certainly not insignificant either, and it indicates a gradual increase in activity of Baltic companies in making international transactions.
Historically, Baltic companies have more often been acquisition targets than buyers. Has foreign investor interest decreased?
Not exactly. Statistics show that foreign investors are continuing to actively acquire Baltic companies. However, Baltic companies are increasingly becoming buyers themselves. A noticeable increase in such activity emerged around 2020; before that, such transactions were relatively rare – only a few examples could be found of Baltic companies acting as buyers in international M&A deals. This shift has been driven by several factors. First, Baltic companies have accumulated significant experience over the past 30 years – a generation of managers and owners has emerged who are confident and ready to expand internationally. Second, companies have accumulated the capital to finance such transactions. Moreover, many companies have now reached a size that enables them to attract bank financing for deals of this type.
Which markets are Baltic companies primarily targeting?
The specific target markets depend on the particular industry the company operates in, but a common strategy is to prioritise geographically and culturally proximate regions to ease post-acquisition integration and reduce costs. Traditional sectors typically target the Nordics, Eastern Europe, and other nearby European countries, often favouring Central and Eastern Europe due to lower acquisition prices and higher growth potential. As a result, Baltic entrepreneurs are actively considering developing markets like Romania and Bulgaria, where significant opportunities remain.
Are investments in Romania and Bulgaria comparable to earlier Scandinavian investments in the Baltics?
Exactly. Scandinavian companies once invested actively in Latvia and other Baltic countries because costs were lower, while the market was sufficiently developed and growing. This created opportunities to develop business in an environment that was not yet fully saturated. A similar logic applies today – lower costs and higher growth potential in countries such as Bulgaria and Romania make them attractive to Baltic companies. At the same time, another tendency should be mentioned: for technology startups and fast-growing companies, the United States remains highly attractive. These companies often aim to enter the US market as quickly as possible – sometimes through acquisitions, but in other cases simply by establishing their own operations there.
Which sectors are currently the most active in international M&A transactions in the Baltics?
We observe a relatively broad distribution across sectors, so it would not be accurate to highlight one specific industry as significantly more active than others. Activity is fairly balanced.
It is clear that cross-border transactions are more complex than domestic ones. What are the main challenges companies face when executing M&A transactions abroad?
The biggest challenges arise after a transaction: culture, communication and ongoing management. Entrepreneurs often find these issues more significant and difficult than anticipated, especially when dealing with companies in other countries. While many believe the transaction phase – negotiations, financing, and due diligence – is the hardest stage, the integration that follows is typically the most complex. If integration is inefficient, initial goals may not be met, and the investment might underperform. Therefore, it is critical to assess integration risks before closing any deal.
How would you define successful integration?
It is usually a combination of several factors. For example, it is crucial to establish effective cooperation with local management after the transaction. If management does not align with the new owner’s strategy quickly enough, the company may not operate as efficiently as planned and may fail to deliver the expected financial results. There are also cases where local management resists and acts contrary to the interests of the new owner. This can result in wasted time and financial resources, as well as the need for additional investments, such as replacing or strengthening the local management team.
What is the role of advisors in such transactions? How important is their support when entering a new market?
The role of advisors is highly significant. However, there is no universal formula – what works for one company may not work for another. It is important to find the right advisors, who complement the company’s own competencies. Each company and each transaction is different, and therefore, the optimal advisory team will also vary. Advisors support the process in several ways.
First, cross-border transactions in a new market are always riskier than domestic deals, where companies are already familiar with the market and have established networks. Advisors can help identify these additional risks, structure the transaction, and ensure that the company’s interests are properly represented. Local experts are also often involved to provide a deeper understanding of the specific market. Second, the involvement of advisors can help mitigate integration risks after the transaction. It is a team effort – the better the advisory team complements the company’s own capabilities, the more successful the outcome will be.
Recently, we have observed an increasing tendency among Baltic buyers to entrust the management of international acquisition processes to their trusted Baltic advisors. We are happy about this development, as our accumulated knowledge and long-term experience with Baltic clients allow us to manage such processes more efficiently. We understand these clients and their strategy, know their teams well, and have extensive experience in international markets. This enables us to propose solutions that are both convenient and tailored to the client, while effectively protecting their interests in the relevant foreign market.
What should companies pay the most attention to when executing international M&A transactions?
One of the most important aspects is carrying out thorough due diligence on the target company. If the market is less familiar, this analysis must be even more detailed than in domestic transactions. This applies not only to financial indicators, but also to the team, management structure, and overall market environment in which the company operates. It is essential to invest the time to truly understand the local market, as assumptions based on experiences in one’s home country may not apply elsewhere. Therefore, more time and resources must be allocated to due diligence in such cases.
What makes a company attractive for acquisition?
Companies are acquired for various strategic reasons, so there is no single universal set of criteria. However, regardless of strategy, buyers typically look for well-managed companies with a transparent track record, a clear management structure, well-organised processes, and strong potential for synergy with the acquiring company’s existing operations. Stable cash flow and financial soundness are also important. Ideally, the company will already have a solid market position while still offering growth potential.
If we compare establishing a new company abroad to acquiring an existing one, what are the main advantages and disadvantages of each approach?
The main advantage of acquiring an existing company is speed. The company is already operational, with an established structure, customer base, and revenue stream, meaning it can start generating returns immediately after the transaction. For example, if a company acquires a manufacturing facility or business abroad, it already has its market, customers and distribution channels. This allows for faster integration and utilisation of existing infrastructure. It may also create additional opportunities, such as offering other products to the existing customer base.
By contrast, establishing a company from scratch is usually much slower. Time is required to build infrastructure, recruit employees, develop a customer base, and establish a market position. As a result, financial returns typically begin later. For this reason, companies often choose acquisitions as a faster way to enter a new market, although the decision ultimately depends on the company’s strategy and the specific market conditions.
What are your forecasts for the future – will Baltic companies’ activity in international M&A transactions continue to grow?
It appears that interest in such transactions is increasing year by year, and I believe this trend will continue. One reason is that more and more local companies are reaching a size where, to continue developing, they need to pursue growth opportunities abroad. Another important factor is the accumulation of experience. The more successful examples there are, the more others are encouraged. These transactions are always significant and risky, requiring substantial investment.
However, with a growing number of Baltic companies already successfully executing such deals and others learning from their experience, entrepreneurs are becoming more confident in taking this step. Moreover, by acquiring companies abroad and exporting their expertise – for example, in digitalisation – Baltic businesses can create real added value and achieve strong investment returns.
Join us at the Baltic M&A and Private Equity Forum 2026
The rise of Baltic outbound M&A will be one of several key topics discussed at the Baltic M&A and Private Equity Forum 2026, taking place on 23 April in Riga. The forum brings together leading investors, advisors, and corporate decision‑makers to exchange perspectives on market developments and growth strategies shaping the region.
🔗 Find out more about the programme and speakers on the forum website.
