This is proving to be a highly unpredictable time for M&As in Central and Eastern Europe.
In just the first week of November, we have seen one major deal collapse, a second effectively placed on life support and a third completed smoothly. At the same time, there has been speculation in the international media that another potential deal is in the offing.
The most important of these is arguably the failed deal. Had it gone ahead, Vectra and Multimedia Polska would have joined forces to form the largest cable operator in Poland.
Coming as this did only months after UPC’s decision to withdraw its offer Multimedia Polska, some in the industry feel there are forces at play trying to obstruct consolidation in the cable sector. The competition authority UOKiK, in particular, has come in for criticism.
Meanwhile, the deal on life support is CME’s sale of its broadcasting assets in Slovenia to United Group. First announced in July 2017 as part of a sale also involving CME’s Croatian interests, it is on the brink of being rejected by the Slovenian Competition Protection Agency (AVK) after it raised a number of concerns.
On the other hand, the smoothly completed deal has seen Telekom Srbija acquire a 100% stake in Kopernikus Technology, Serbia’s second largest cable operator, from the private equity firm Abris Capital Partners. Telekom Srbija is currently expanding its presence in both Serbia and neighbouring countries and this acquisition is likely to prove particularly significant.
Finally, the speculation involves Liberty Global’s DTH assets in the CEE region, or specifically Hungary, the Czech Republic, Slovakia and Romania. According to a report in Bloomberg, a sale that values them at $114 million, or six times their estimated earnings for this year, is in the process of being finalised.
This of course raises questions as to what Liberty Global’s plans are for its cable operations in Poland and Slovakia. They have been omitted from the Vodafone deal and may not feature in Liberty’s long-term plans.
As 2018 draws to a close, we are likely to see even more M&A activity in the CEE region.