The Russian M&A market has experienced significant growth in recent years. There has been an increased consolidation of businesses, and mergers and acquisitions. The volume of M&A deals involving Russian companies during only nine months of 2007 has exceeded US$100bn. This was supported by the growth of the Russian economy and an increased interest of foreign investors in the Russian market and of Russian investors in targets overseas.

General trends on the Russian M&A market

According to the Russian magazine “Mergers and Acquisitions”, the aggregate volume of M&A deals involving Russian companies exceeded $42 bn in 2006 and during nine months of 2007 $100 bn.[1]

Although the share of the Russian M&A market in the global and European M&A markets is not high (about 2 and 6.2 per cent, correspondingly)[2], this share is steadily increased.

The Russian M&A market has become more diversified with time. It is no longer restricted to the oil, gas and metals sectors. The share of other segments of the market, such as finance, telecommunications, trade, industrial manufacturing, insurance and construction, continues to grow.

The Russian Government traditionally plays an important role on the M&A market through a system of various regulatory authorities, including antitrust and securities market agencies.

As to a territorial diversity of the market, traditionally Moscow and surrounding areas take the lead in terms of both quantify and value of transactions, followed by North-Western region, including St. Petersburg.

However, an interesting trend has emerged as other regions of Russia start to gain more prominence on the M&A market.
Another important trend is that instead of being exclusively net importer of capital Russia has become an exporter of capital. Russian businesses invest in assets all over the world. A substantial share of these overseas activities currently relates to metals and mining.

Russian business approaches these deals well-equipped by engaging a pool of experienced legal and financial advisers for its M&A projects.

(see part 2)