BULGARIA Law and Practice Contributed by: Yordan Naydenov, Mihail Vishanin and Hristian Gueorguiev, Boyanov & Co.
1. Trends 1.1 M&A Market
1.2 Key Trends The expectations for 2025 are for a comparable number of small and medium-sized deals and for two megadeals – the sale of the oil refinery in Burgas, owned by the Russian energy corpora - tion Lukoil, and the potential sale of the business of Vivacom, one the largest telecoms companies operating in Bulgaria, owned by United Group (United Group has already sold its business in Serbia as well as a part of its business in Bul - garia). There are indications that the IT sector, which had been facing difficulties towards the end of 2023 and to some extent throughout 2024, will “wake up” and return to the level of activity known from previous years. The role of local private equity funds is also becoming more and more noticeable, with some of them already daring to turn their eyes towards neighbour - ing markets such as Croatia, Serbia and North Macedonia. The war in Ukraine will continue to be a huge destabilising factor across the entire region, negatively affecting normal political and business life in the country, yet certain efforts to put an end to the conflict are already visible at the time of writing (February 2025). On the other hand, the efforts of Bulgaria to become a full member of the Schengen area were successful, and on 1 January 2025, the land border barriers with the neighbouring EU Member States were effectively lifted. As for the last remaining step towards Bulgaria’s full EU integration, namely admission to the eurozone, the earliest this could be expected is in the beginning of 2026, and the government plans to request a Convergence Report in early spring 2025. This adds a certain optimism regarding the business future of the country, M&A activity included. 1.3 Key Industries The most active sectors in the past 12 months include energy (renewables in particular), IT and
Two factors played significant role in determin - ing M&A and investment activities in Bulgaria in 2024. Firstly, the ongoing war in Ukraine con - tinued to damage the investment climate in Bulgaria, keeping strategic investors cautious towards Eastern Europe, and secondly, there was the internal political climate, with seven general elections in a period of three years, fol - lowed by parliaments that were not capable of forming stable governments. Still, economic activity in the M&A sector remained steady and, indeed, there was a slight improvement com - pared to the previous year, amounting to over 80 transactions (including major business real estate deals), an achievement that is fairly stand - ard for an economy the size of Bulgaria. M&A activity in Bulgaria did not decline due to the global anti-inflation measures, despite the fears expressed in this direction, yet we did not see a significant growth in either the number of M&A activities or their scale. As in previous years, the vast majority of corporate transfers were rather small in size, and outside of renewable energy and technology companies, most buyers were local. For the first time in 15 years, there were no transactions exceeding EUR100 million in value. Still, we witnessed one acquisition in the banking sector – the acquisition of 99% of the capital of Tokuda Bank (a relatively small port - folio bank) by Bulgarian American Credit Bank – and one acquisition in the insurance sector – the full acquisition of United Health Insurance Fund Doverie, (one of the leading players in the field of health insurance) by Generali CEE Holding, which already owns and operates an insurance company in Bulgaria, Generali Insurance AD. Given the small size of the Bulgarian banking and insurance markets, transactions of this type are very rare.
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