Vernon David Partners Sergiu Bivol and Roman Ivanov talk about M&A in Moldova in 2025.
CEELM: What would be your bet at this start of the year – will 2025 see more, fewer, or the same level of activity in terms of M&As in Moldova?
Ivanov: We always hope for the best, but we are closely watching Ukraine. Whatever happens there will affect us. We are still involved in a couple of M&A transactions and hope that this year won’t be worse than last year.
Bivol: I am also optimistic about 2025. We’re already working on significant M&A deals in financial and non-financial sectors, though we can’t disclose names. Additionally, European buyers are showing interest in Moldova.
CEELM: What do you believe will be the main elements determining the results at the end of the year?
Ivanov: I believe that geopolitical factors and donor support are critical. It’s unclear if Moldova will continue receiving assistance from the US, but the EU has recently announced significant support. This assistance could attract businesses to Moldova. It is difficult to foresee, but we will focus on finalizing deals and observing the situation.
Bivol: The situation in Ukraine is indeed a major hurdle. If the war stops, we could see a significant increase in investments and corporate M&A activity. Many Ukrainian investments were made in Moldova to relocate businesses. If the war ends, Moldova could become more attractive for international investments, especially for those interested in Ukraine’s reconstruction. We are also monitoring security issues related to energy supply and legislation changes.
CEELM: Since you mentioned it, are there any pieces of legislation on the horizon that you are keeping an eye on as potentially impacting the M&A market in 2025?
Ivanov: Yes, there are several legislative developments to watch. The government announced tenders for large-capacity renewable energy projects, which could boost M&A activity. However, new FDI legislation is being implemented, which includes stricter screening and assessment of investors. This could impact M&A deals, especially in the energy sector.
Bivol: Looking at the broader picture, Moldova is also aligning its legislation with EU requirements, as it’s now a candidate for EU membership. This includes improvements in corporate and financial laws, which should make it easier for investors to operate. These changes are positive overall but will take time to fully implement.
CEELM: Who do you expect to be the main buyers in Moldova in 2025?
Ivanov: Most buyers are international, with strategic investors leading the way. Local buyers aren’t as active due to limited resources and risk appetite. Geographically, many investors come from Romania, as it’s easier to set up logistics and operations there. We’re also seeing interest from more exotic countries like Qatar, Israel, and Denmark, which are just starting to explore opportunities in Moldova.
Bivol: I agree. Strategic investors dominate, especially in sectors like renewable energy, where Nordic countries are showing interest. Romania remains a key player, often serving as a gateway for investors entering Moldova. Local investors, unfortunately, lack the capacity to compete at the same level.
CEELM: What do you expect will be the most attractive targets in Moldova in 2025, and what will make them so?
Ivanov: The energy sector is booming and will likely see the most activity. Financial institutions, particularly smaller banks, are also attractive targets. Moldova has 10 banks, which is quite a lot for such a small country, and we’re already seeing larger banks acquiring smaller ones that lack the resources to compete.
Bivol: I have reservations about the attractiveness of the financial sector. While mergers are happening, the improved legal framework following past banking fraud has made Moldova more attractive for new banks to enter the market. Additionally, the energy sector will continue to be a key target due to legislative changes and the need for renewable energy sources.
This article was originally published in Issue 12.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
