The key topic of discussion was the state of the Russian M&A market and its prospects in the context of a changing economic and geopolitical situation. Participants of the congress summarized the period, analyzed the latest trends, discussed opportunities for investors, and complex issues related to the legal and tax aspects of making deals.
According to the analytical portal mergers.ru, 2024 marked a noticeable change in the structure of the M&A market. Despite a decrease in the total market volume in dollar terms to $30.8 billion, there was a 6% increase in the number of deals, reaching 478 compared to the previous year. This paradox indicates a shift towards smaller deals but with increased domestic activity. A key trend that may dominate the market in 2025 is the resale of assets of companies that have left the Russian market. Experts note that the exit of foreign companies has opened new opportunities for asset redistribution and, in many cases, led to an increase in the prices of acquired companies (despite the general background of declining business valuations observed recently).
KKMP Senior Associate Valerian Mamageishvili, in the expert session "Best Practices in M&A Deals", jointly with representatives from Verba Legal and B1, presented “Trends in the Development of the M&A Market”. Speakers in the expert session discussed the presented material and their vision of key market trends.
Below are the key takeaways and questions discussed during the session:
A decrease in the number of deals involving the exit of foreign companies and the overall impact of such deals on the M&A market.
Expectation of deals to resell assets acquired in exit deals. Key reasons and complexities of structuring such deals.
High uncertainty and lack of objective reasons for the mass return of foreign companies that sold their businesses in exit deals.
Growing investor interest in the segment of distressed assets.
Factors influencing the increase in IPOs/SPOs in 2025.
Potential for joint ventures in the context of high cost of debt and low liquidity.
Trend towards deals involving internal restructuring of Russian businesses.
Growing popularity of ZPIF (real estate investment funds) and other new forms of asset ownership. Impact of tax reform and sanctions risks on market participants.
The trend of redomiciliation of Russian businesses is waning, but it is still too early to say so.
Trends in pricing issues for M&A deals and the order of settlements.
Growing value of due diligence for business buyers and key risks identified during checks.
Current ways to protect the rights of buyers regarding identified risks: standard buyer due diligence in light of the latest judicial practice. Possible alternatives to representations and warranties for greater protection of buyer interests.
Emphasizing the general cautious optimism of the Congress participants regarding the M&A market in the near future, Valerian noted:
In the past year, two key factors have significantly impacted the M&A market: the high cost of money, which leads to a liquidity deficit, and the tightening of regulation of exit deals, which acted as a market driver in previous years. These factors negatively affect the market as a whole. At the same time, we can observe high activity from strategic buyers, IT sector players, and a general trend towards consolidation of segments.
In any scenario for the further development of the market, clarity about the consequences of agreed-upon deal mechanics and the ability to use those instruments in court in the final draft document are key for both parties to the deal.