M&A in Russia's agribusiness sector up 56% to 299 bln rubles in 2023 - Russian Agricultural Bank
MOSCOW. March 11 (Interfax) - Mergers and acquisitions (M&A) in Russia's agribusiness sector grew by 56% to 299 billion rubles in 2023 from 192 billion rubles in 2022, the managing director of the large business department at Russian Agricultural Bank (RusAg), Ilya Shumov said in an online conference on Monday.
In U.S. dollar terms, M&A in the sector grew by 16% to $3.45 billion from $2.97 billion a year earlier. The number of transactions increased to 80 from 51, but the average value of transactions dropped to $43 million from $58 million.
The key segment of the market was the food industry, which saw 26 deals worth about $1.61 billion, according to Shumov's presentation. There were 46 transactions in agriculture worth $1.52 billion. The value of deals related to foreign companies leaving Russia grew to $630 million from $449 million, but their number dropped to 11 from 14 a year earlier.
The top five transactions in 2023 were worth about $1.6 billion. The largest was the sale of agribusiness group Yug Rusi (oil extraction plants) for $450 million.
By number of deals, Tavros Group led with six transactions worth $118 million, followed by Resurs Group with four deals worth $58 million. M&A helped Tavros to become the leader on Russia's table egg market in 2023, the presentation said.
In agriculture, greenhouse vegetable farming led with $795 million in transactions, or 23% of the market. Interest in livestock farming grew, with deals totaling $214 million or 6% of the market. Transactions in the fisheries and crop farming sectors totaled $213 million and $172.3 million, respectively.
Trends on the M&A market this year include the continued exodus of foreign companies, foremost in the food industry, increased interest in assets in Siberia and the Far East, and the continued consolidation of agribusiness groups and their vertical integration with entry into new segments, Shumov said. "For example, Resurs Group bought assets in milk processing and pig farming," he said.
He also said there are big opportunities for M&A in sectors such as beef production and processing, fish processing and feed production.
"The sunflower oil production segment is interesting. Despite the fact that the degree of market consolidation is fairly high - the top five have about 44% of the market - the industry has high export potential and many are trying to buy assets in the form of oil extraction plants," Shumov said.
Strong export potential is also maintaining interest in M&A in crop farming. Although companies are getting bigger, the top ten in this sector still only account for 6% of arable land, Shumov said.
He also said there are prospects for M&A in fruit and berry growing, as well as potato farming due to the low consolidation of these markets.
Nonetheless, the amount of M&A in Russia's agribusiness sector in 2024 will decrease because most transactions with foreign companies have been completed, the presentation forecast.