In recent years, 7.2bn euros have been sold in Romanian companies. Foreigners bought the vast majority, with purchases by Romanians totalling just 100m euros.
Transactions make the headlines in the business press all over the world and Ziarul Financiar has endeavoured to be among the first to report them. Today, in its Top Transactions of 2000-2005 yearbook, Ziarul Financiar is offering you a look into the biggest deals of the last five years.
Mergers and acquisitions provide first hand clues as to the value of a company or an industry.
The competition keeps its eyes open for every move: who buys what and for how much, in order to know the value of their own business.
Yet from the moment of the first phone call to the actual signing of the contract, there are hundreds of hours of negotiations, lengthy debates, decision changes and repeated phone conversations, as well as e-mails. This is why we thought we should offer you a merger and acquisitions handbook, which does not include theoretical speculation, just practical examples.
Who is behind the biggest acquisitions? How was the market analysed in search of the best opportunity? How was the price set and how long did it take to negotiate it? Which bankers or lawyers provided advice? How long did it take, from the first contacts to the official announcement of the deal? How transparent were the negotiations?
We talked to the people who conducted the transactions or with those who provided them with advice, seeking to answer all these questions.
The list includes privatisations, sales of businesses to investment funds, as well as businessmen who created firms from scratch, only to sell up in a few years and move on to another field.
Entrepreneurs like Florentin Banu (Joe wafers bought by Nestle and the Artima chain store bought by the investment fund Polish Enterprise Fund), Jean Valvis (Dorna mineral water sold to Coca-Cola), Mihai Miron (the Europharm drug factory sold to Glaxo) or Radu Georgescu (the RAV antivirus solution sold to Microsoft) - they all began working on something else right after selling their first business.
Banu is building apartment buildings, Valvis is investing in milk, Miron in livestock farming and Georgescu has IT consulting and e-commerce projects. All in all, they collected over 1bn euros for their business in the last five years.
It is not easy to part with what you created. There have been powerful personal attachments between entrepreneurs and their brands. "For a while I hid the truth about the transaction from my children because they had a very strong connection with the brand and I did not have the courage to tell them. Unfortunately, they found out about it at school, from the CCHBC manager''s son, and I had much more trouble explaining it to them then,?" recounts Jean Valvis, who sold Dorna to Coca-Cola. The biggest transaction of the last five years in terms of value is the privatisation of Banca Comerciala Romana, estimated at more than 3bn euros for a 62% stake. This is twice as much as the entire amount the Romanian state has received from all the privatisations over the last five years, a figure totalling 1.32bn euros. ZF
US-based investment fund QVT Fund wants to make the Czechs at Zentiva offer a higher price in their tender offer put out for the pharmaceuticals manufacturer Sicomed Bucharest, in order to allow them to attain their goal of delisting the company from the Stock Exchange. Zentiva has to obtain a stake of more than 95% in Sicomed in order to delist it, but QVT came to own 7% after buying massive amounts of stock over the last few days. Zentiva currently owns 51% in Sicomed through the investment vehicle Venoma Holdings. The Czechs paid some $102m (over 85m euros), the total value of Sicomed thus being put at $200m. QVT officials say they will not sell at the current price being offered, and the Czechs will therefore be unable to delist Sicomed. After having been contacted by Ziarul Financiar, Zentiva officials had not made any comment on this topic by the time the story was going to print. "Zentiva can no longer delist Sicomed without QVT Fund''s consent to sell its stake, which now stands at more than 7%. The market price is higher than in the offer, therefore the tender offer will not achieve its goal. From our talks with other shareholders, we gathered that other minority investors beside QVT Fund will not sell their stakes at anything less than 1.5 RON/share at the current exchange rate," stated Angelo Moskov, QVT''s London-based manager.
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