WHAT DIFFERENCE DOES a decade make? In 1997, communism in central and eastern Europe was still a recent memory. Privatization had begun just a few years before, and even the biggest companies were still finding their feet. Some firms from the region had started to spread their wings abroad but the companies they were buying were tiny. According to Dealogic, the top three cross-border M&A deals to be announced in 1997 where the acquirer was a CEE company reached a cumulative total of just $161 million.
Ten years later, even if the acquisitions made by the Russian natural resources companies are excluded, the figure will be more than 10 times as big. By August this year, the top three foreign acquisitions announced by CEE companies (discounting Russia) had already reached a total of almost $2 billion, according to Dealogic.
Corporate CEE, it seems, is feeling the benefit of having eight of its countries join the European Union in 2004.
The biggest firms in countries such as Poland, the Czech Republic and Hungary are no longer content to snap up the smallest companies in neighbouring states. As they increasingly take advantage of opportunities in CEE countries outside the EU, they are laying the groundwork to be able to compete against, and perhaps even overtake, their more western-based rivals.
