ARMENIA Trends and Developments Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
HAP 4/3 Adonts street Yeraz business centre 3rd floor Yerevan Armenia Tel: +374 9140 3605 Email: hayk.hovhannisyan@hap.am Web: www.hap.am
Overview Mergers and Acquisitions (M&A) are important mechanisms for company development, capital redistribution, and economic growth. The eco - nomic instability caused by COVID-19, wars and potential political risks, and changes in interest rates have generally had their impact on both the overall economy and the M&A market. At the same time, the business world is experiencing sharp and periodic shifts—from the growth of artificial intelligence to the increasing importance of sustainable development and the emergence of a more demanding class of consumers armed with technological capabilities. Under these con - ditions, executives from various sectors report that M&A has become a more important strate - gic lever than ever before. Currently, the dynamic changes in Armenia’s economy, developments in the global investment environment, and local market characteristics greatly impact the course and development of M&A transactions. Back in April 2024, in the “Asian Development Outlook” report, the Asian Development Bank forecasted a moderate growth of Armenia’s Gross Domestic Product (GDP) in 2024 to 5.7% compared to 8.7% in the previous yearIt is note - worthy that, according to preliminary data from the RA National Statistical Committee, Armenia’s economic activity indicator for January- Novem -
ber 2024 increased by 7.4% compared to the same period in 2023. According to the above- mentioned report, this indicator is predicted to grow again to 6% in 2025, conditioned by the successful implementation of the Government’s expanded investment programs in infrastructure and housing construction. Currently, the M&A transaction market in Arme - nia continues to develop, reflecting both local and global economic and legal changes. Inter - est in this sector has increased in recent years due to economic diversification, expansion of investment opportunities, and the desire for integration with global markets, especially in information technology, finance, energy, tel - ecommunications, and several other sectors, to understand the characteristics of the merger and acquisition market in Armenia. It is necessary to examine the nature of the country’s corporate culture. Local enterprises are primarily formed and managed based on family or kinship ties, which limits the classical application of merg - ers and acquisitions. These processes are more commonly found between companies with state participation, especially in state non-commercial organizations in the healthcare and education sectors. In 2024, Bank of Georgia Group PLC became the largest shareholder of Ameriabank CJSC. In November 2024, Ardshinbank CJSC
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