Betting on the Merger. Russian M&A market grows by 54%

In the second quarter of 2025, the Russian M&A market showed a marked resurgence, with deal volume reaching $11.3 billion. Experts attribute this to expectations of a loosening of the Central Bank’s monetary policy and the ongoing exit of foreign investors from the Russian market. At the same time, Russian investors have been expanding their presence abroad. While experts anticipate a continued recovery in the M&A market, cross-border deals are expected to remain rare and limited to 'friendly' jurisdictions.

According to a report by the news agency AK&M, the volume of M&A deals valued at $1 million or more rose by 54% in the second quarter of 2025 compared to the first, reaching $11.3 billion. Meanwhile, the average deal value has remained steady at around $92–94 million over the past three quarters. The highest M&A volumes were recorded in the transport ($1.92 billion), construction ($1.76 billion), and services ($1.71 billion) sectors. AK&M highlights the acquisition of a 50% stake in Avito by entities linked to Rosselkhozbank, estimated at $1.2 billion, as one of the quarter's most notable transactions (see Kommersant from April 24).

The market growth in the second quarter of 2024 can be attributed to the gradual easing of monetary policy, which makes financing for deals more accessible and the impact of pent-up demand following the market slump seen in the early months of 2025, explains Anton Levdonsky, a senior financial advisory manager at Marillion. Raising the key interest rate dampens investment, while slowing growth lowers company valuations and makes selling less attractive; furthermore, changes in tax legislation prompted many sellers to close deals before the end of 2024, creating a 'dip' in activity for early 2025, explains Denis Surovtsev, a partner in the Investments and Capital Markets department at Kepta. Business owners who had previously expanded their market presence and operational scale in anticipation of a sale have also become more active. According to Pavel Samiev, CEO of the analytical agency Businessdrom, these owners sensed a deterioration in cash flow, revenue, and margins, concluding that "waiting any longer risked worsening their financial health," and thus moved more quickly to negotiate and finalize deals.

The review also notes an increase in cross-border transactions. Specifically, the first half of 2025 saw companies from France, Germany, the US, Austria, and the Netherlands exiting the Russian market. However, Russian investors were also acquiring foreign assets. According to Lyudmila Eremina, Deputy CEO of the AK&M Agency, "the trend of making acquisitions in friendly nations is gaining momentum, particularly in the metallurgy and mining sectors." In May 2025, Rusal signed an agreement to acquire the Indian alumina producer Pioneer Aluminium Industries Limited for $468.8 million. The second-largest deal took place in the IT sector, where a subsidiary of the Veon holding company acquired the taxi aggregator service Uklon for $155 million. Ranking third was Solidcore Resources’ agreement to acquire a controlling stake in the Tokhtar and Yuzhny Tokhtar gold deposits in Kazakhstan for $25 million. Regarding foreign acquisitions of Russian companies, the majority of such deals during the current period involved purchasing assets located directly within Russia, whereas last year, foreign entities primarily acquired Russian-owned assets located abroad.

According to experts, the resurgence in cross-border activity is linked to the stabilization of the international situation. Denis Surovtsev believes this stems from a degree of stabilization in the restrictive measures facing Russian companies, such as sanctions, payment system cutoffs, and self-imposed restrictions, allowing investors to better understand risk levels and ways to mitigate them. A number of companies are also seeking to diversify their resource bases (components, technology) to reduce their lingering dependence on foreign vendors, notes Andrey Filippenko, a partner at Forward Legal.

By the end of 2024, the Russian M&A market had returned to 'pre-war' 2021 levels in terms of the number of deals.

Experts anticipate further market revitalization through the end of the year. Mr. Filippenko is confident that if the Central Bank continues to ease monetary policy at its next meeting, the market should pick up and show positive momentum in both volume and pricing metrics. At the same time, according to Anton Levdonsky, significant growth in cross-border deals is possible only if there is a fundamental shift in macroeconomic conditions and, in particular, the external environment. Most likely, such transactions will remain isolated cases for now; they will probably often take place within the CIS and may be linked to goals of diversification and the mitigation of sanctions-related risks, the expert believes.

Source: Kommersant Publishing House

Link to the original publication: https://www.kommersant.ru/doc/7942120