PwC: the telecommunications sector in good shape
According to a review of PricewaterhouseCoopers «Mergers and acquisitions in the telecommunications sector» in 2009, deals in this sector reached a low level of the early 2000's, while the value of transactions fell by 95% compared with the results of the two previous years. Number of transactions in 2006 exceeded 100, and the cost of close to 40 billion euros largely due to transactions between AT & T and BellSouth, the acquisition of cable networks and the Viacom deal Telefonica/O2. But even excluding these transactions that a sharp jump in recalls Oscillation 2001, when the dotcom-boom around the company achieved its highest performance.
However, after taking off in 2006 in the following year there was a sharp decline in the volume of transactions (85%), while the average value of transactions in 2008 reflect the performance of 2002, ie 51 million euros and 47 million euros respectively. Last year was quite successful for the telecommunications sector, where there has been an increase in equity prices and volume of transactions. However, since September 2008, changes in market conditions and the impact on the sector where the volume of transactions has fallen sharply, and the market was virtually closed for major deals.
In 2008, the Central and Eastern Europe has finally been hit in the center of attention. The largest deal in Europe was the acquisition by VimpelCom of Golden Telecom Holding for 3 billion euros in all three major deals last year were involved either Russia or Greece. Nevertheless, despite the level of activity in this region, there was reduction in the overall level of activity in Europe as to the value or volume of transactions.
The shortage of liquidity (notably bank loans) will hinder the implementation of mergers and acquisitions transactions in all sectors of the economy in 2009, but in this case, the cycle still influences the specificity of the telecommunications sector. The telecommunications industry as capital-intensive industry, will always require substantial borrowing. The situation in industry has been favorable in 2008, when the total amount owed to maturity was less than in previous years. However, the situation is further complicated because of the need to repay loans in the amount of 47 billion euro in 2009 and 180 billion euros in the next 4 years.
However, after taking off in 2006 in the following year there was a sharp decline in the volume of transactions (85%), while the average value of transactions in 2008 reflect the performance of 2002, ie 51 million euros and 47 million euros respectively. Last year was quite successful for the telecommunications sector, where there has been an increase in equity prices and volume of transactions. However, since September 2008, changes in market conditions and the impact on the sector where the volume of transactions has fallen sharply, and the market was virtually closed for major deals.
In 2008, the Central and Eastern Europe has finally been hit in the center of attention. The largest deal in Europe was the acquisition by VimpelCom of Golden Telecom Holding for 3 billion euros in all three major deals last year were involved either Russia or Greece. Nevertheless, despite the level of activity in this region, there was reduction in the overall level of activity in Europe as to the value or volume of transactions.
The shortage of liquidity (notably bank loans) will hinder the implementation of mergers and acquisitions transactions in all sectors of the economy in 2009, but in this case, the cycle still influences the specificity of the telecommunications sector. The telecommunications industry as capital-intensive industry, will always require substantial borrowing. The situation in industry has been favorable in 2008, when the total amount owed to maturity was less than in previous years. However, the situation is further complicated because of the need to repay loans in the amount of 47 billion euro in 2009 and 180 billion euros in the next 4 years.
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