Unveiling 2023's Deals in Emerging Markets
Reflecting on 2023's deals, we revisit last year's most memorable transactions. The year was marked by impactful dealings across the Emerging Markets, reshaping the global M&A landscape.
January set the tone for the year ahead in Russia, highlighting a continued corporate exodus. U.S. paper giant International Paper made headlines by announcing the sale of its 50% stake in Russia's leading pulp and paper manufacturer, Ilim Group for EUR 2.7bn. The local project partners of International Paper, namely Zakhar Smushkin, Boris, and Mikhail Zingarevich, emerged as the buyers, collectively holding the remaining shares in the target.
In February, we shifted our focus to China, where the agricultural company COFCO Fortune Co Ltd revealed a strategic investment of CNY 21bn (USD 3.1bn) from the National Council for Social Security Fund (NCSSF). This significant transaction resulted in the Chinese sovereign wealth fund becoming the second-largest shareholder in COFCO Fortune.
In March, our attention remained on China as Saudi Arabian Oil Co (Aramco) secured a CNY 24.6bn (USD 3.6bn) deal to acquire a 10%-stake in fiber manufacturer Rongsheng Petrochemical. As part of the strategic arrangement, the world’s largest integrated oil and gas company committed to supplying 480,000 bpd of Arabian crude oil Rongsheng’s unit Zhejiang Petroleum and Chemical, which owns and operates the largest integrated refining and chemicals complex in China.
In April, Italy's Enel initiated its exit from Peru by announcing the sale of its power distribution and supply assets, along with advanced energy services, to state-owned China Southern Power Grid. The deal was valued at approximately USD 4bn. Subsequently, Enel continued its divestment strategy by entering into an agreement later in 2023 to sell its Peruvian generation business to the UK-based private equity firm Actis, with a deal value of USD 2.1bn.
In May, Singapore-based online fashion retailer SHEIN secured approximately USD 2bn in a fresh funding round, with key participation from Sequoia Capital China, General Atlantic, and the sovereign-wealth fund of the United Arab Emirates, Mubadala. Despite this infusion of new capital, the company's valuation experienced a decline, dropping from USD 100bn in the previous year to USD 66bn.
In June, the largest deal in Emerging Markets for 2023 unfolded. Spanish energy company Iberdrola announced an agreement for the sale of numerous power plants in Mexico to the government, marking a deal valued at around USD 6bn. As part of the arrangement, State-owned Mexico Infrastructure Partners will take over 12 combined cycle power generation facilities and a wind farm, amassing a total installed capacity of 8,539 MW.
Amidst the scorching July sun, UAE-based Emirates Telecommunications Group (Etisalat) unveiled its strategic acquisition of a controlling stake in PPF Telecom's assets across Bulgaria, Hungary, Serbia, and Slovakia. The deal, amounting to up to EUR 2.5bn, emerged as the most significant transaction in Emerging Europe last year. PPF Telecom, with a customer base exceeding 10 million, marked a key addition to Etisalat's expanding portfolio.
In August, BYD Electronic, a Hong Kong-listed unit of Chinese automaker BYD, revealed its acquisition of the Chinese smartphone components business of U.S.-based manufacturing solutions provider Jabil Inc for CNY 15.8bn (USD 2.2bn). The purchased assets encompass the product manufacturing business situated in the Chinese cities of Chengdu and Wuxi.
September saw another major Russian exit - local lender Gazprombank acquired all 14 Mega-branded shopping and entertainment centers from Dutch-based real estate lessor Ingka Centres. With an estimated value surpassing USD 2bn, this transaction stands out as the largest by value in the Russian commercial real estate market for 2023.
In October, Dutch-Belgian grocery retailer Ahold Delhaize finalized an agreement to acquire its Romanian counterpart, Profi Rom Food, from UK-based private equity investor MidEuropa for a total consideration of EUR 1.8bn. This strategic move is expected to significantly expand Ahold Delhaize's current operations in Romania, more than doubling its scope. The acquisition also brings a valuable diversification to Ahold Delhaize's existing footprint in Romania, enhancing its ability to cater to both urban and rural areas more effectively.
EMIS alongside leading global law firm CMS, are pleased to be launching the Emerging Europe M&A 2023/24 Report, exploring the trends and data within the region, on both a country and sector basis. Download your complimentary copy.
Original source: EMIS M&A Dealwatch