In the past year, M&A activity in Belarus has grown beyond perhaps the wildest expectations, and the gloomy predictions of a year ago have not come true. With the internal political crisis unresolved and indeed affecting the wider region, international sanctions looming, and the domestic economy slumping again after the global recovery post-Covid, the number and scale of M&A transactions hit record highs, comments Maksim Salahub, head of the Corporate & M&A practice group at Sorainen’s Belarus office.

A few highlights:

  • The tech sector was the main driver of this activity. Belarusian gamedev and social media-related startups experienced new rounds of investments from Russia, China and the US. There have been successful exits from mature projects by Belarusian PE funds and other investors, with European and other international acquirers taking over.
  • PandaDoc, a Belarusian startup in the field of document digitisation, with an HQ in San Francisco and a sizeable R&D centre at Belarus’s Hi-Tech Park, became Belarus’s first official “unicorn”, a company valued above USD 1 billion, after successfully closing a Series C co-led by OMERS Growth Equity and G Squared.
  • Most transactions in the Belarusian tech sector were not public.
  • Unlike previous years, we did not hear much about new investments by Belarusian PE funds (Zubr and others).
  • Likely more than half of transactions were foreign-to-foreign – i.e. took place outside Belarus, with indirect acquisition of assets in the country.
  • A number of international investors – from the EU, Turkey and China – have undertaken to increase their shares in joint ventures with Belarusian state-owned enterprises and holdings (on some occasions, by up to 100%), and also to extend their expiring investment agreements with the Belarusian state. Despite international diplomatic controversy, the introduction of international sanctions in relation to the Belarusian government, the uncertain situation in Belarus and the whole region, and instances of pressure on Western business due to their employees having been convicted of active participation in the protests of 2020–2021, there have been no major exits by Western investors thus far. It seems that this part of the business community is stressed by the uncertainty and country-specific risks but is carrying on, hoping for better ahead.

Read more about the M&A and private equity market in the Baltics and Belarus – overview of 2021 and trends.