Good for Business, Investments, Latvia, Markets and Companies, Technology, USA

KPMG's study of the mergers and acquisitions (M&A) market "Global M&A Predictor" is very optimistic – companies are becoming better prepared for new business deals, and are also improving their financial capacity for new business activities in the future. Due to the falling value of the Russian ruble, Russian investors are less likely to be involved in important business transactions.

KPMG Baltics spokeswoman Julija Masane-Ose told the press representatives that in 2015, M&A activity in Latvia will increase. So far, the number of foreign companies buying shares in local companies made up less than half of the entire M&A activity in the Baltic States. Nevertheless, this proportion can change, taking into account the current market conditions, as the Baltic States are among the fastest growing economies in the European Union. It would be no surprise if American companies acquired various Baltic enterprises this year, as the recovery in the United States is fast and its stock market indexes are very high. However, one of the most constricting factors is the size of the Baltic market. In order to become more attractive to foreign investors, Baltic enterprises need to be remarkable players on the local market, they have to be prepared to act globally or offer unique products and technologies, Masane-Ose said.

It is said that M&A activity in 2015 will be influenced by circumstances which are specific to Latvia. The geopolitical situation could facilitate consolidation of the local market and increase the number of M&A transactions. Food (especially dairy) producers, which fully depend on their exports to Russia, could consolidate their activities in order to achieve cost synergy. At the same time, investors from Russia that, historically, have been rather active in Latvia, will find it more difficult to carry out business deals due to the fall of the ruble. Consolidation opportunities will remain in several other sectors, for example, IT and telecommunications, distribution of pharmaceuticals, and construction, says Masane-Ose.