In 2021, the Baltic M&A and private equity market demonstrated record activity, with the number of announced deals growing by 51% compared to 2020 and also surpassing deal activity levels in all previous years, including those preceding the start of the pandemic. As a result, we can find leading Baltic law firms among the top 6 positions on the Central and Eastern European advisor leaderboards, side-by-side with global legal market heavyweights. This shows that the Baltic investment climate has been favourable to investors.
Deal values increasing but not reaching the record year 2018
The market has clearly recovered from the slump at the beginning of the pandemic. However, while the deal values in 2021 were significantly higher than in 2020, they remained below the record level of 2018 (EUR 2,296 million in 2021 compared to EUR 2,778 million in 2018), which was a special year of remarkable M&A deals in the Baltics. There has been a clear jump (almost a doubling) from the 2019 and 2020 deal value level (from EUR 1,184 million in 2020 to EUR 2,296 million in 2021)
Lithuanian deal market leads by deal count while Estonia shows highest deal value
Having led the Baltic M&A deal market by deal activity in previous years, Estonia now slips to second position, handing over the leadership to Lithuania (48 deals announced in Lithuania in 2021, compared to 43 in Estonia and 24 in Latvia). Nevertheless, in 2021 the number of M&A deals in Estonia set a record compared to previous years (43 in 2021; 32 in 2020; 26 in 2019; and 33 in 2018, which was a very strong year). In Latvia, the deal count also improved significantly compared to 2020, growing from 15 in 2020 to 24 in 2021). The value of deals in Estonia was significantly higher compared to Latvia and Lithuania (EUR 1,706 million compared to EUR 235 million in Latvia and EUR 356 million in Lithuania in 2021).
TMT, energy and startups leading the way
The TMT sector continues to drive the M&A market with its active search for investors. Also high in deal activity in 2021 were the real estate and construction, services, and energy and utilities sectors.
When looking at the top 10 Baltic deals by disclosed value, we can see that PE/VC funds acted as investors in as many as seven of them. For two years in a row (2020 and 2021) half of the top 10 Baltic deals by disclosed value have been startup deals.
TOP 10 M&A deals in the Baltics in 2021
Estonia – led by the energy, startup and healthcare sectors, the deal market is booming
2021 – a very vibrant and busy year for Latvian M&A
2021 – a blowout year for M&A in Lithuania
Belarus – driven by the tech sector, the M&A and PE market saw growth despite gloomy expectations