CA IB Achieved New Record Year vs. International Trends
- Central and Eastern Europe is still a growth market.
- Capital markets transactions dominate in Austria.
- Optimistic outlook.
CA IB Corporate Finance, the unit in charge of strategic corporate advisory within Bank Austria Creditanstalt Group, achieved a new record in 2003. The transaction volume again increased to more than EUR 2.5bn (compared with EUR 2bn in 2002). This is a strong performance, all the more so as 2003 was not a glamorous year for the global players. In Central and Eastern Europe, where CA IB has an ideal position, the mergers & acquisitions business continues to develop well, and in Austria the numerous capital markets transactions are a major contributor to overall revenues.
Mergers & acquisitions advisory
Along with the European M&A volume, which reduced significantly to EUR 280bn (compared to 623bn in 2002)*, also Central and Eastern Europe experienced a reduction to EUR 10bn (down from EUR 21bn in 2002)*. Given this development, CA IB’s balanced focus on CEE and Austria is a major advantage. However, the current situation is looking much brighter again.
To a greater extent than in the past, the take-over of companies within Central and Eastern Europe plays a major role. In addition to Western corporates buying companies in CEE, nowadays more and more companies from CEE region make bids for businesses in the region. A current example is the privatisation of the Hungarian steel group Dunaferr to a consortium led by the Industrial Union of Donbas (IUD), in which CA IB advises the buyside.
* Source: MergerMarket
Equity capital markets
In Austria, strategic changes in ownership currently mainly happen via the capital markets. Right at the beginning of the year, two large block trades took place under a leading position of CA IB, together with the sales team of BA-CA. On January 21st, 14.8% in Telekom Austria were sold in the market, and on February 17th, a 24.6% stake in Wienerberger followed, both carried out in only a few hours.
In three of the four large equity issues of the past year on the Vienna Stock Exchange, namely Andritz, Bank Austria Creditanstalt and Böhler-Uddeholm, CA IB acted as Bookrunner and Lead Manager. Poland was the most active new issues market in CEE, ending a long period during which no new issues were seen on the Warsaw Stock Exchange. CA IB supported two IPOs, namely Impel and Hoop. The dual listing of Bank Austria Creditanstalt on the Warsaw Stock Exchange, however, was the main boost to the market.
Along with exploring new markets, CA IB is gaining new business opportunities. Only recently having resumed its advisory role in Russia, CA IB can report a first success. Namely the U.S.-based MCT (Indigo), which sold a number of Russian mobile phone companies to Mobile TeleSystems (MTS), the leading Russian mobile provider, which is listed on the New York Stock Exchange.
In the name of the Azerbaijani Government, CA IB is searching for buyers for the communication sector. This includes a conglomerate of companies from the telecoms and media sector, amongst them the state-owned broadcasting monopoly, Aztelekom. The mobile phone provider Bakcell was already successfully sold to an Israeli investor.
In Uzbekistan, CA IB is working on the privatisation of the country’s largest steel plant. Under a mandated by the Uzbek Government, this company should be sold to an international steel group.
Other new activities include the southern Mediterranean region, where CA IB is engaged in a transaction for the Tunisian insurance sector.
Merchant banking as a new business field
A few weeks ago, CA IB moved towards the new field of merchant banking. The widespread network of CA IB is a huge benefit in this respect. Currently, CA IB is examining four investment opportunities. The merchant banking activity, which ideally completes the existing fields of M&A and ECM, should develop into a significant pillar of the business activities within the upcoming two years.
The forecast for the current business year is very positive. The year 2004 will bring the conclusion of numerous projects which have already started, in the mergers & acquisitions business as well as in equity capital markets.
In Austria, CA IB is currently mandated to carry out a number of privatisation transactions. Amongst others, CA IB is working on the privatisation of five state-owned housing companies together with Lehman Brothers. Moreover, CA IB is advising Austrian corporates on various acquisitions in CEE. In the field of equity capital markets, CA IB is preparing further transactions, about which – for reasons of confidentiality - details cannot be disclosed.
Due to its large network, CA IB is increasingly used by international groups to represent them In Central and Eastern Europe. In some countries, the market development currently is very dynamic, e.g. in Hungary and Poland. In Slovakia, CA IB represents the Russian energy group RAO UES.
Contact: Bank Austria Creditanstalt International Markets
Veronika Fischer-Rief, phone.: +43-(0)-50505-82833