M&A Radar 2020: Ukraine - March 2021 - KPMG in Ukraine kpmg.ua - assets.kpmg
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M&A Radar 2020: Ukraine March 2021 KPMG in Ukraine kpmg.ua
2 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 3
Contents Introduction
2020: a year quite unlike any other
When we launched the 2019 edition of the Ukrainian M&A In the face of new waves and variants of COVID-19, the
Radar, few could have predicted the profound impact approval of several vaccines and the rollout of vaccination
COVID-19 would have on the global population, the world programmes around the world, including in Ukraine, raises
economy or our daily lives in the year ahead. hopes that we may see a turning point in both the pandemic
and its economic impact in 2021.
With over 100 countries in full or partial lockdown by the
end of March 2020, most economies around the world Investor confidence in Ukraine will to some extent depend
slid into recession despite governments and international on how Ukraine resolves ongoing issues, such as the
financial institutions injecting billions of dollars to tackle the dispute with the Constitutional Court of Ukraine, the
Introduction Overview 2020 in review Cross-border pandemic. Ukrainian government’s near USD1 billion debt to RES
M&A Dynamics Beyond the economic impact, the pandemic has ushered
producers, and protracted negotiations with the IMF over
the Stand-By Arrangement. These are the most immediate
in long-lasting changes to our lives. Global digital
concerns affecting confidence and investors will be
transformation has accelerated for businesses, consumers
watching to how they are handled in the months ahead.
and individuals alike; remote and hybrid working has
3 4 6 9
become the norm rather than the exception. Video calls for Despite these headwinds, Ukraine and the United Arab
work and socialising, together with e-commerce, are now Emirates signed investment memoranda worth USD3
a mainstay of our lives. Such effects will continue to drive billion in February 2021. Such a statement of intent will not
M&A as an agent for change. have gone unnoticed by others eying Ukraine's investment
potential. There are reasons, therefore, to be cautiously
Lockdown saw a sharp decline in human activity, leading
optimistic about the outlook for Ukrainian M&A and wider
to a global awakening to the negative impact mankind can
investment in the country in the coming year.
have on our planet. This propelled environmental, social,
and corporate governance (ESG) issues up the political and We hope you will find the 2020 edition of the Ukrainian
corporate agenda, putting them prominently into focus for a M&A Radar both insightful and thought provoking.
wider pool of investors.
Peter Latos
2021 оutlook Sector activity Appendix
Partner,
Head of Consulting
and Deal Advisory
KPMG in Ukraine
12 18 33
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4 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 5
Overview
The reluctance of investors to commit capital as a result of
15% 62% 44% the pandemic was evidenced by the small number of deals
69 $925 m $28 m 4.4% exceeding USD100million in value during 2020.
Deal volume Deal value Average transaction value GDP
Ten largest Ukrainian M&A deals in 2020
Ukrainian M&A (2013 – 2020) No. Target Sector Acquirer Vendor % Value,
The economic impact of the COVID-19 acquired USDm
pandemic ended three consecutive years of 2013 3,319 500 109 1 TIS Container Transport and DP World PLC TIS.UA 51% 130
growth in Ukrainian M&A.
Terminal, LLC infrastructure
2014 994 1,588 36
2 Eurozhytlogroup Real estate and Dragon Capital Not disclosed 100% 110
According to the National Bank of Ukraine (NBU), real GDP construction
fell by 4.4 percent in 2020, compared with a forecast of 3.5 2015 1,011 48
percent growth at the end of 2019. 3 Khmelnytsk- Agriculture Epicentr K Svarog West Group 96.7% 100
Agro
2016 785 55
This was the largest decline in the Ukrainian economy
since the 2013 – 2014 Revolution of Dignity. Considering 4 BILLA Consumer UAB Consul Trade REWE International AG 100% 70
the strong correlation between the real economy and 2017 987 67 Ukraine Ltd. markets House
corporate transactions, it comes as no surprise that the
value of Ukrainian M&A also experienced a swift and abrupt 5 Kaskad-Agro Agriculture Agartha Fund LP; Vitalii Khomutynnyk - 100% 70
2018 1,109 714 81 Agricultural Alexandre Garese - private investor
downturn in 2020, falling by 62 percent to USD 0.9 billion.
Holding private investor
The volume of activity fell back toward the level of 2017; with
2019 1,686 734 81 6 Volia-Cable Innovations and Datagroup; Mykhailo Kyiv Telecommunication 100% 68
only 69 transactions announced during 2020, reflecting a 15
percent decline on the prior year. technology Shelemba - private Networks; Telesvit
2020 925
investor; Horizon Capital
The decline in the value of Ukrainian M&A was partly 69
attributable to the lower level of transparency. Deal 7 Restream service Innovations and Sapphire Ventures, Not disclosed Not 50
values were disclosed in only 48 percent of transactions Deal value (excl. Significant deals technology Insight Partners and disclosed
announced in 2020, significantly below the level of significant deals) (>USD500m) other investors
transparency of more mature markets.
Deal volume 8 Dnipro Hotel Real estate and Smartland State Property Fund 100% 41
construction
At the same time, the average transaction value fell to
USD28 million. This was attributable to a combination of the 9 JKX Oil&Gas Oil and gas Bridgewater Holdings Not disclosed 19.97% 30
reluctance amongst some investors to commit capital during Corp
the pandemic, the inability of some to raise finance during
this period, and non-distressed sellers preferring to delay 10 EVERI Ltd. Transport and Glencore Agriculture OREXIM Group of 100% 25
deals in anticipation of achieving higher price multiples. infrastructure Limited Companies
Combined total 694
As % of total Ukrainian M&A 75%
Inbound
Domestic
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6 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 7
2020 in review
Consumer spending 2020, YoY The NBU should also take credit for the success of its
The economic slowdown induced by the Ukrainian M&A activity started to gather monetary policy. Despite pricing pressures building during
12.5% H2 2020 as a result of the pandemic, higher import prices
pandemic influenced some investors to adopt momentum in the summer and was at full-
as the Hryvnia depreciated, and the need for the Ukrainian
a more cautious approach to evaluating and 8.4% speed in Q4, with a little under two-thirds of government to raise gas utility prices as part of the IMF
negotiating deals in 2020. 1.4%
deals announced in H2 2020. agreement, inflation remained under control; rising from
4.1 percent to 5.0 percent over the course of 2020. As
This was partially attributed to easing of Ukraine’s previously a result, the NBU was able to slash its policy rate from
A total of 27 deals worth USD456 million were announced severe lockdown, similar to relaxation seen in other European 13.5 percent in January to 6.0 percent by June 2020, where
during H1 2020; reflecting a 40% drop in deal volume and Q1 Q2 Q3 Q4
states, and partially due to optimism generated by the it stayed for the remainder of the year.
47 drop in deal value compared to H1 2019, and the lowest announcement of agreement of a revised International The easing of lockdown restrictions and improving economic
mid-year totals since H1 2015. Monetary Fund (IMF) ‘Stand-By Arrangement’ (SBA) intended climate in H2 2020 helped to fuel the recovery in Ukrainian
Ukrainian M&A started slowly in 2020 and was further to advance Ukraine a USD5 billion loan for an 18-month period. M&A activity, with August really being the turning point as six
depressed by the lockdown which started in March. This The Ukrainian government took further steps to support the real deals were announced worth a combined USD125 million.
more measured approach to deal-making saw the volume economy and strengthen the country’s macro-financial stability
of deals announced and completed during the year fall to 14.9%
by cutting the prime rate, a move supported by the National Bank
74 percent, down from 88 percent in 2019, with a handful of Ukraine (NBU) and the European Bank for Reconstruction and Recovery continued in Q4 2020 with 26 deals
of deals announced during 2020 actually cancelled; the first 2020 was a rollercoaster ride for the wider consumer sector.
Development (EBRD) agreeing on a USD500 million FX swap. announced worth a total value of USD187
cases since 2017. The first lockdown and stagnation of nominal wage growth million, making this the most active quarter for
saw consumer spending fall 14.9 percent year-on-year (YoY) Furthermore, with over USD1 billion invested during 2020,
In April 2020, Regal Petroleum announced that its USD39
in Q2, compared to growth of 12.5 percent YoY in Q1. Ukraine was the third-largest recipient of EBRD funds after Ukrainian deal-making since 2014.
million deal to acquire Ukrnaftinvest had lapsed and in June Turkey and Egypt.
2020 Dragon Capital terminated its proposed acquisition of Easing of lockdown restrictions helped consumer spending
Idea Bank. Dragon Capital explicitly stated that its decision recover in Q3 with YoY growth of 1.4 percent, although the The most sizeable EBRD contributions were to projects However, economic headwinds were already building
was largely due to the economic crisis caused by the spread of full effect of this spending (combined with the resumption related to the transport and infrastructure sector, including: before a second wave of COVID-19 forced renewed global
COVID-19, both in Ukraine and around the world, significantly of low double-digit nominal wage growth, pent up demand lockdowns as 2020 came to a close.
affecting the potential risks associated with the acquisition. and the forthcoming holiday season) was really only evident Issues around further IMF SBA tranche payments were
€450m
in Q4; which recorded 8.4 percent YoY growth. compounded by the October decision of the Constitutional
Although most market participants focused on preserving
operations in order to emerge intact from the pandemic, The pandemic has undoubtedly led to structural changes in Court of Ukraine to rule many of the 2014 anti-corruption
some seized the chance to make opportunistic acquisitions. consumer spending behaviour and accelerated demand for reforms unconstitutional. This decision had significant
Others continued to complete transactions that had been e-commerce across many categories; something companies To support Ukravtodor's renovation consequences and resulted in hesitance from the IMF to
long in the making regardless of the pandemic, driven by the like the MAKEUP Group will be eager to capitalise on. of existing roads and construction fulfil its second SBA payment to Ukraine.
long-term fundamentals of the target companies. of a bypass near Lviv to provide
Traditional brick-and-mortar retailers will have to evolve The additional failure of the Ukrainian government to meet
better access to the Trans-European
their business models to meet the challenges these Ukrenergo’s near USD1 billion obligation to RES producers
Transport Network
changes present. Novus supermarket, owned by Lithuania’s (as the guaranteed buyer under laws it enacted in July 2020)
Deals announced & completed
BT Invest, virtually doubled its footprint through the also raised concerns that reinforced the IMF's doubts about
Ukraine's political will to implement suggested changes.
74% 88% €63m
USD70 million acquisition of Billa-Ukraine’s portfolio of 35
supermarkets. Meanwhile, the home improvement retailer This inability to meet IMF targets for reform has raised
Epicentr K is not wasting any time; in their USD1.2 billion questions over when, or even if, there will be a second
2020 2019 investment programme announced in January 2021, the payment. The contagion of these events has inevitably led
retailer unveiled plans to develop their online offering and To enable Ukrposhta, the state
postal service, to push ahead with to a slow start for Ukrainian M&A in 2021, with only six
build logistics fulfillment centres. deals announced by mid-February 2021.
much needed upgrades to logistics
In May 2020, as the market began to accept the inevitable
infrastructure and expand the rural These deals included airSlate, a Ukrainian technology
period of turbulence ahead, the Belgian industrial minerals
reach of its operating fleet company specialising in process automation and document
group Sibelco acquired Ukrainian clay mining companies
Euromineral and Kurdyumovsky Acid Resistant Products management solutions, closing a USD40 million round
Plant. Horizon Capital’s Emerging Europe Growth Fund also of investment from Morgan Stanley Expansion Capital,
400
acquired a significant minority stake in the MAKEUP Group; General Catalyst, and HighSage Ventures.
a fast-growing leader in e-commerce and beauty. Meanwhile, Qatari NEBRAS group invested in six Ukrainian
wind farms and two solar power plants, and OKKO announced
Purchase of 400 energy efficient acquisition of Kherson crude oil transshipment terminal.
trolleybus to replace ageing fleets
in 12 Ukrainian cities
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8 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 9
While a number of M&A trends can be traced
back to late 2019; the pandemic, changing
consumer behaviour and concerns regarding
supply security have accelerated changes that
were already underway.
Digitisation: E-commerce:
with digital transformation a online retail and remote
Cross-border
key strategic goal for most services have been able to
businesses, the providers take advantage of the decline
of new technologies are in more traditional consumer
themselves targets for acquisition. Ukraine’s IT sector has segments resulting from quarantine measures, as well as
always been highly regarded and is getting stronger with the rapid shift to remote working. Online delivery services
M&A Dynamics
every passing year. in particular have seen a boom in demand during the
pandemic for obvious reasons.
According to the State Statistics Service of Ukraine, exports
of computer services increased to USD2.1 billion in the first In Ukraine, local delivery service Glovo reported growth of
nine months of 2020, reflecting YoY growth of 15 percent. 40 to 50 percent ahead of budget, helping the company to
This growth helped propel Ukrainian M&A in the innovation achieve breakeven despite investing millions of euros into
and technology sector to USD184 million in 2020. developing its services.
Deals included Restream’s USD50 million funding round Changes in supply chains:
led by Sapphire Ventures and Insight Partners, after the lockdowns in China and other
multiplatform live-streaming company announced 300 parts of Asia during Q4 2019
percent growth in the number of monthly views for the first caused widespread disruption
seven months of 2020. to global supply chains, leading
some companies to reassess their dependence on the
region and look for alternative sources of supply. Pent-
up demand and trade growth accelerated the process of
launching new delivery routes, such as a twice-weekly rail
freight service connecting European and Asian destinations
via the Baltic-Black Sea transport corridor and Baltic-Black
Sea transport corridor connecting the Black Sea and the
Baltic.
This, combined with Ukraine opening up its infrastructure
to public private partnerships (PPP), saw USD164 million of
deals announced in the transport and infrastructure sector.
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10 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 11
Cross-border M&A Dynamics
Domestic Outbound Inbound
39% 7% 97% 67% 69% 22%
$514 m 43 $7 m 1 $405 m 25
Deal value Deal volume Deal value Deal volume Deal value Deal volume
This was also the main reason for a 58 percent decline in the
Domestic investment remained the dominant Following the trends of recent years, Ukrainian Despite lockdown restrictions limiting average transaction value to USD37 million (2019: USD88
force of Ukrainian M&A in 2020 million); the lowest value since 2014. The transparency
investment in foreign M&A targets continued international travel, inbound M&A still accounted
of inbound deals continued the declining trend of recent
to decline in 2020, with just one outbound deal for over one-third of total deal volume. years, falling from 47 percent in 2019 to 44 percent in 2020
announced. (compared to a high of 69 percent in 2014).
Domestic M&A accounted for 55 percent of the value and
62 percent of the volume of Ukrainian deal-making. Europe (USD135 million, 14 transactions), the Middle East
Foreign investors favoured Ukraine’s innovation and (USD130 million, one transaction), and North America
The largest domestic deal announced in 2020 was the Horizon Capital’s Emerging Europe Growth Fund III (EEGF
technology (nine deals), agriculture (six deals), and (USD70 million, eight transactions) accounted for a
USD110 million acquisition of Eurozhytlogroup (owners of III) invested USD7 million for the acquisition of a 6.8
transport and infrastructure (four deals) sectors, which combined 83 percent of all inbound deal value and 92
101 Tower Business Centre) by Dragon Capital. percent stake in Moldova's Purcari Wineries. The Moldovan
accounted for just over three-quarters of all inbound deals percent of deal volume in 2020.
wine company is well known to Horizon which previously
The average value of domestic transactions in 2020 in 2020.
invested into the business via its EEGF II fund, divesting its
decreased by 10 percent to USD24 million; the lowest level Investments from North America were mainly
stake by October 2019 and earning a 3.3 times cash return The 25 inbound deals announced in 2020 were
since 2014. Meanwhile transparency, in terms of disclosed attributable to private equity and venture capital funds
for its investors. undertaken by 21 different investors, of which one-
deal values, fell from 67 percent in 2019 to 49 percent. investing in Ukrainian IT start-ups, including Restream’s
third were new entrants to the Ukrainian market. While USD50 million round of fundraising. Foreign investments
The outlook for outbound M&A remains depressed with
Approximately 90 percent (USD464 million) of domestic European investors were the most active inbound from Europe, meanwhile, were mainly directed towards
most companies focussing on the domestic market,
M&A spend was concentrated in four sectors in 2020. Real acquirers overall, new market entrants were from the agriculture and the transport and infrastructure sector.
although continued export growth and investment into
estate and construction attracted USD205 million, driven USA (five) and France (two). In 2020, foreign investors purchased four terminals
infrastructure needed to get goods and people to foreign
largely by Dragon Capital’s activity in the sector, followed by markets may stimulate activity in the medium-term. Although the combined total of deals was down by 69 in Odesa, five elevators and 118,000 hectares of land
agriculture at USD100 million, innovation and technologies percent on the previous year, it is important to remember banks.
at USD84 million, and oil and gas at USD75 million. that Bakcell’s USD734 million acquisition of Vodafone
A little over half of all domestic M&A volume was focused Ukraine accounted for almost two-thirds of inbound M&A
on the same sectors: the real estate and construction sector in 2019.
(nine transactions), agriculture (seven), innovations and
technology (four), and oil and gas (four).
Inbound M&A deal value by region (USDm), Inbound M&A deal volume by region,
2019 vs 2020 2019 vs 2020
2019 2020 2019 2020
6% 11% 11%
17% 3% 4% 8%
32% 3%
32%
15% 64% 11%
34% 56% 64%
17% 12%
CIS Europe North America MEA CIS Europe North America MEA
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12 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 13
2021 outlook
If the headwinds can be addressed quickly, and the pieces of the jigsaw fall into place,
there is reason to be cautiously optimistic for a modest increase in the overall value and
volume of Ukrainian M&A during 2021. We predict that momentum will really start to
build in the second half of the year, with a brighter outlook beyond this.
5% 3%
GDP Budget deficit
This continuing uncertainty The Ukrainian government Concerns remain over the Ukraine will need to invest a Recently announced plans Changes in legislation should
will likely mean that some expects GDP to rally by nearly delayed Stand-By Arrangement significant amount of money in give further reason to be help to fuel further investment
investment decisions will be five percent YoY in 2021; (SBA) and the potential for shifting its power sector from optimistic about the outlook for in Ukraine, particularly in the
delayed and M&A deals remain driven by a mixture of pent- a political crisis as reforms, high carbon emission coal and investment in 2021. transport and infrastructure,
subdued at similar levels seen up investment and consumer required for successful heavily coal-based products to and agriculture sectors.
in 2020. spending. conclusion of the IMF deal, are cleaner energy.
In the short-term, the USD3 billion
now in question. worth of memoranda and contracts On a more positive note, one of the
signed between Ukraine and the key reforms expected this year is the
With case numbers continuing to There are, of course, far too many This is a key part of future engagement
United Arab Emirates in February next stage of implementing the Law on
fluctuate, and the vaccination rollout in uncertainties concerning the future The IMF has only paid USD2.1 billion with the EU in order to meet ambitious
2021 during President Zelensky’s Agricultural Land Markets, passed by
its infancy, it is too early to determine direction of the pandemic both in European carbon management
of the USD5 billion SBA so far, holding official visit to the Emirates is a the Rada at the end of March last year.
whether or not Ukraine is over the Ukraine and with the country’s major targets and which will ultimately test
back the remaining USD2.9 billion clear statement of intent regarding The next phase is due to take effect on
latest wave of the pandemic. If the trade partners to have any clarity at government’s commitment to the
because of the Ukrainian government’s future cooperation between the two 1 July 2021 and will cancel the current
pandemic can be brought under control the start of the year. Forecasts will European Green Deal. It is expected
inevitably change in the first half of decision to regulate household gas sovereign nations. moratorium on land ownership. This
during Q2 2021, it will allow public and prices. The government has said that the EU and European investors will
2021 as pandemic trends are better will help to attract investment from
economic sector restrictions to be that these were forced measures provide a large amount of investment While it remains to be seen how
understood and lockdowns start to domestic and foreign sources into the
lifted. throughout the winter period caused in Renewables, particularly in wind quickly this translates into capital
ease. Ukrainian agricultural sector.
by the country’s coronavirus lockdown; and solar power, assuming that the committed to the Ukrainian state
Only when investors and multinational Legislative changes implemented
This continuing uncertainty will likely necessary to avoid a jump in energy stand-off over unpaid debts between enterprises and private companies
companies see verifiable evidence by the Ukrainian government and
mean that some investment decisions bills whose prices have already led to renewable energy generators and involved, this agreement (together
of the end of the pandemic and the lawmakers during 2020 have paved the
will be delayed and M&A deals remain protests across the country. Ukrenergo is swiftly resolved. with the possibility for creation of a
start of a pickup in economic activity way for implementing long overdue
subdued during H1 2021. Ukrainian sovereign fund to co-invest
will there be a solid recovery in M&A While the Ukrainian government is Last year, the European Union
with foreign investors) should go some and long awaited investment into the
activity. This applies as equally to currently trying to convince the IMF named Ukraine as a priority partner
way to restoring international investor transport and infrastructure sector.
Ukraine as other European states. that this temporary solution was for implementation of the European
confidence.
taken in extraordinary circumstances, Hydrogen Strategy, with an eye on the
despite Ukraine’s obligation to launch country’s gas transmission system to As for domestic investment, Head of
market mechanisms in the natural transport green hydrogen to the EU. It Dragon Capital Tomas Fiala recently
gas market as outlined in the shared remains to be seen what investment announced the group’s plan to close
memorandum. this will drive in Ukraine and over what five deals in 2021. Together with
time horizon. co-investors and Western funds,
Ukraine is scheduled to pay back Dragon Capital envisions deal values
USD5.2 billion of external debt in 2021 However, investors and businesses
of about USD200 million this year,
and is also likely to run a budget deficit managers will be paying close attention
which would signal a return to the
of between three and four percent of to what happens with Ukrenergo’s USD1
rate of investments seen before the
GDP. billion debt obligation to RES producers.
pandemic.
A quick and decisive resolution of the
issue would go some way to restoring
broader investor confidence in Ukraine.
Ukraine will be in a strong position to see a revival of investor interest during the second-half of 2021, provided the pandemic is
brought under control, the obligation to RES producers is not fulfilled and the IMF tranche is not delayed for too much longer.
© 2021
© 2021 KPMG.
KPMG. All
All rights
rights reserved.
reserved.
14 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 15
Deal-making: art or science?
The fundamental premise of M&A has stood the test of
time. Put simply, investors believe that an asset or company M&A deals, particularly in more challenging Preparing for buyer scrutiny is a crucial
will generate a higher return under their ownership than in market conditions like a pandemic, run the risk but often overlooked step. Buyers rarely
the hands of its current owner. However, the realisation of of failing due to an unrealistic price expectation complete acquisitions without undertaking
these higher returns requires two things.
gap between the seller and the buyer. comprehensive due diligence to evaluate the
risks, liabilities and potential upsides of a deal.
Firstly, successful navigation of the deal
Therefore, understanding the value of what you have to
process. Secondly, ensuring that the factors that Ideally, a seller will review information in detail from a
offer to a buyer is key. Taking time to develop a well thought
create or erode value are well understood and through equity story that management buys into, one buyer’s perspective, usually with the support of external
managed. One could argue that the first is an which provides a compelling basis for a buyer to invest, is advisors, in order to identify risks and latent upside
art, the second is a science. essential. potential. This will include taking action to identify, cure or
mitigate risks and realise upsides in advance of making any
The incumbent management team must be capable of information available to buyers in the data room.
As the saying goes, “time kills deals”. In reality, however, delivering the company’s strategy for growth as most buyers
the failure to properly prepare for, and then manage, the will expect to retain this team in the medium-term at least. It is also crucial that management is appropriately
Illya Segeda M&A process from beginning to end is what will eventually Meanwhile, projections should be underpinned by historic prepared for buyer scrutiny by dry-running management
kill a deal. performance and external market analysis. Having a realistic presentations, answering due diligence questions, and
M&A Principal, ensuring processes are in place to routinely update
view of the company’s value from a buyer’s perspective is
Deal Advisory But what are the key elements of preparing a business for information in a consistent manner.
key.
KPMG in Ukraine sale and how do we set about organising them?
Understanding the seller’s motivation for the deal is a key
first step. Rarely are deals solely predicated on maximising Identifying the right ‘buyer universe’ is equally At the end of the day, deal-making
a company’s monetary value at exit. as important as defining a clear deal strategy requires assembling the right team
Other important factors include the reputation of a buyer, and a compelling equity story. in the right location with the right
speed of deal execution, the cleanliness of the deal (in experience and skills. KPMG has more
terms of warranties, indemnities, deferred or contingent
consideration, etc.), and custodianship of the business,
than 50 deal professionals in Ukraine,
It is important to create appropriate competitive tension in
management and staff post-deal. All of these different the deal process. Having access to buyers at the right level
covering all aspects of the M&A
concerns influence deal strategy. is critical for this, just as it is for knowing what different process; including M&A lead advisory,
buyers will attribute value to in the business for sale. valuation, due diligence (financial,
Building this understanding through initial desktop research,
tax, legal, IT, cyber and integrity),
market soundings, and direct access to shareholders and negotiation support and SPA advisory.
the management of potential buyers enables the finetuning
of deal strategy, equity story and marketing materials. This
will enhance the deal’s likelihood of success before formally
going-to-market.
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16 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 17
Deal-making: beyond
the pandemic While travel restrictions imposed by the pandemic clearly
impacted the ability to do deals, particularly cross-border,
the use of virtual data rooms and video conferencing had
While the use of material adverse change
The Covid-19 pandemic is likely to have (MAC) clauses, which enable one or both
already reduced the need for travel during a deal process.
a long-lasting effect on deal-making. parties to terminate a deal under certain
The resulting acceleration of digital Inevitably, though, there will still be a need to ‘kick the tyres’ circumstances, have been on the rise, we are
transformation, disruption to traditional
and look the other side in the whites of their eyes during starting to see pandemic-related factors being
negotiation. excluded from MAC clauses in some SPAs.
business models and changes in consumer
behaviour will see a greater number of While it is difficult to replace that need with technology,
the use of drones and computer visioning provides a viable
smaller, distressed carve-out transactions as alternative to a physical fixed asset and inventory inspection But what does the “ordinary course of business” look
companies refocus their value chains. in sectors such as agriculture, energy and natural resources, like during a time of unprecedented uncertainty, like a
In turn, this will likely accelerate the adoption of new trends and transport and infrastructure. pandemic? Buyers need to carefully consider the pros and
in due diligence given the need to use multiple data sources cons of a locked box, including their ability to recover any
to validate assumptions and look beyond the financials. proven leakage from the seller post-factum.
KPMG’s Site Surveyor is an example of how
While the pandemic has resulted in an increased level of
uncertainty in both actual and prospective data, robust
Svitlana such technology can be used in this context to
facilitate a potential deal. The choice of completion mechanism will
financial analysis remains core to any deal, albeit with a shift Shcherbatyuk
in emphasis. Historical underlying earnings and working largely depend on the relative bargaining
Transaction Services Lead, power of each party; sellers will often favour
capital analysis should be separated into pre- and post-
lockdown periods, combined with run-rate analysis and
Deal Advisory, Deal negotiations will often become bogged down in the certainty of a locked box, while buyers will
KPMG in Ukraine times of uncertainty due to price expectation gaps; even
even transaction level data, in order to isolate fundamental
distressed sellers typically have a hard time accepting a
see that completion accounts afford greater
business drivers from pandemic related noise. security by adjusting for events which impact
price at the bottom of the cycle. In the current environment,
With businesses across most sectors grappling with digital more and more deals are relying on post-closing on price post-factum.
Forecasts will require even greater scrutiny transformation and remote working, combined with the performance-related price mechanisms, such as earn-outs,
of underlying assumptions, revenue and growth of e-commerce and direct-to-customer business as one way to bridge the price gap.
models, IT and information security is of increasing The world is looking to 2021 with hope for a return to
cost drivers, order-book, and market trends. However, it’s important to carefully consider how such normality or, at least, something close to it. Vaccine rollouts
importance when assessing the value of a company.
Augmenting the target’s financial data with mechanisms are drafted and calculated – the more complex, give expectation that the pandemic will be under control in
real-time operational and external market data It is no longer sufficient to simply evaluate the and more adjustments required to say audited data, the many countries in the second half of the year.
will yield richer business insights to evaluate appropriateness of IT strategy, architecture, and governance more likely the risk of dispute between the parties at the
for the business model and future growth. We are time of payout. Nevertheless, M&A processes will bear the legacy of
both historical and forecast information. COVID-19 for some time to come. This legacy has increased
increasingly seeing the assessment of data security and
Not only has the pandemic impacted the way deals are the complexity of deal-making for the next couple of years
cyber resilience in the context of deal value becoming a
evaluated but also the process for protecting value through at least, requiring buyers and sellers to transform their
Financial and valuation models will need to become more mainstay of the due diligence process.
the transaction documents, such as the share purchase approach to evaluating, negotiating, protecting and realising
dynamic, able to handle a greater number of flexible input agreement (SPA). In times of uncertainty, deal negotiations the value of deals.
assumptions, in order to run multiple scenarios. Use of often proceed more slowly as each party tries to find, in
predictive models, in some cases using thousands of The impact of global economic shutdowns their view, a more equitable way to share risk.
signals, to analyse a range of possible outcomes is likely has highlighted the importance of evaluating
to increase. the target company’s supply chain pre-deal; Locked box completion mechanisms and hybrid locked For many, this will require the support
understanding supplier dependency, security
box mechanisms are also becoming increasingly popular of external deal advisors, like KPMG,
with sellers outside of their traditional mainstay of private
of supply and options for substitution is key equity. Unlike the completion accounts process, a locked
with experience of successfully
KPMG’s Signal Repository is one example of to mitigating business disruption post-deal. box provides greater certainty regarding the price paid but it navigating companies through deals in
how structured and unstructured data can be requires a clearly defined transaction perimeter and for the previous times of uncertainty.
used by organisations to significantly increase seller to operate the business on the buyer’s behalf in the
the accuracy of predictions and business Furthermore, such analysis will also provide the opportunity ordinary course between signing and completion.
outcomes. to identifying potential value upsides that could be secured
post-deal through optimising procurement or category
spend.
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18 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 19
Sector activity Key sectors
Real estate
20
Similar to the previous year, Ukrainian M&A was dominated by four sectors during 2020: innovation
and technology, agriculture, real estate and construction, and transport and infrastructure.
and construction
These four sectors accounted for almost 80 percent of total spend and slightly less than 60 percent of total deal volume.
M&A in the real estate and Digital transformation of the
Innovations
and technology 21 construction sector in recent years
has been buoyed by attractive
returns on retail portfolios, fueled
by consumer spending growth and
global economy, which the
pandemic has accelerated,
and disruption to traditional
business models has helped
Overall Sectoral M&A Breakdown, 2020 vs 2019 increased demand for logistics and to drive demand for Ukraine’s
warehouse infrastructure to meet highly regarded IT sector.
22
the rapid growth of e-commerce.
Agriculture
As Ukraine’s largest export Implementation of the law
industry, it is unsurprising that on concessions, as well as a
the agriculture sector remains growth in trade with China,
the focus for both domestic Europe and the Middle East,
Transport
23
and foreign investors, with the has also contributed to a rise
latter often reflecting sovereign in much-needed investment
and Infrastructure efforts to address food security
concerns.
into Ukraine’s ageing transport
network and infrastructure.
M&A by sector, 2019 – 2020
Value Volume
Real estate 22% 13%
and construction 19% 20%
Innovations 20% 19%
and technology 16% 14%
Agriculture 18% 19%
9% 19%
Transport 18% 9%
and infrastructure 3% 4%
Consumer Markets 10% 7%
2% 10%
Oil and gas 8% 6%
2% 4%
Metals and mining 2% 10%
1% 2%
Banking 1% 9%
and insurence 5%
Healthcare 1% 3%
and pharmaceuticals 4% 7%
2019 2020
© 2021 KPMG-Ukraine Ltd. All rights reserved. © 2021 KPMG-Ukraine Ltd. All rights reserved.20 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 21
Real estate and construction Innovations and technology
56% 44% 3% pts 7% pts 53% 18% 4% pts 5% pts
$205 m 9 22% 13% $184 m 13 20% 19%
Deal value Deal volume Share of Ukrainian Share of Ukrainian Deal value Deal volume Share of Ukrainian Share of Ukrainian
deal value deal volume deal value deal volume
The Ukrainian medicine search-and-delivery platform Liki24
Although investor confidence was impacted by Some industry experts estimate that e-commerce We continue to see strong interest in domestic also raised USD5 million from Horizon Capital and pre-
turbulence in the retail and office segments, real requires three times more warehouse and logistics IT companies, as well as those with a solid existing investors (TA Ventures, Genesis Investments, iClub
developer base in Ukraine. and Mission Tech).
estate and construction continued to account for space than a traditional brick-and-mortar supply
the largest share for Ukrainian M&A deal value. chain and the market certainly seems to reflect this. At the same time, domestic investors remained active in
Ukrainian IT companies and start-ups. At the end of 2020,
Ukraine has a well-deserved reputation as a centre Datagroup, Ukraine’s leading communications solutions
Ukrainian quarantine measures, introduced in March to curb Outside of office space, however, real estate as a whole was not of excellence, which should allow it to capitalise on provider, closed a deal to acquire its well-known domestic
the spread of COVID-19, placed severe restrictions on the a story of decline in 2020. The sustained growth of e-commerce accelerating developments in e-commerce that look certain competitor Volia for USD68 million with the full backing of
operation of retail, restaurant and entertainment facilities. in recent years, which has only accelerated during the pandemic, to provide more opportunities for players in this sector. Horizon Capital’s EEGF II fund.
has been a significant driver of demand in the warehouse and COVID-19 measures and consumer response have also driven
Although restrictions were eased in June, footfall remained
logistics segment of the market. a boost in online activity and a rise in the volume of M&A
depressed due to the need to maintain social distancing. One of the key reforms which the Ukrainian
Simultaneously, the shift to remote working left many Dragon Capital, which first invested into the warehouse and transactions in software, e-industries (such as e-commerce,
e-pay, e-learning, e-gaming and e-health) and data-rich government needs to adopt in the near future is
offices empty or significantly underutilised, leading to some logistics segment in 2016, renewed its focus in 2020 through the
companies reconsidering their long-term needs and vacating acquisition of the Falby pharmaceutical warehouse complex (for industries (including data centres, data and cyber security, to establish a specialised taxation regime for IT
rented spaces. USD5 million) and Lviv Industrial Park (deal value not disclosed). virtual conferences, and data analytics and logistics). companies and IT contractors.
Vacancies, combined with an increase in supply (with Dragon Capital also went on to announce the sale of its SK The ‘new normal’, caused by businesses and governments
80,000 m2 of new office space coming to market in 2020), Omega-2 logistics complex at the end of 2020, offloading it responding to the pandemic, has changed our way of The challenge will be to strike a balance between adjusting
saw Kyiv’s office vacancy rate increase from nine percent to to one of the biggest pharmaceutical distributors in Ukraine, life and our way of doing business; shifting both online the rates and types of taxes concerning IT businesses while
12.5 percent over the course of 2020, while average rental Optima Pharm. more than ever before. This trend is expected to become still maintaining an attractive market for software developers
rates fell by 20 percent. permanent to some degree in the post-pandemic era, as and engineers.
people and businesses see the benefits from this new
Despite the sharp fall in deal value and volume, real estate mode of remote living and working. The global pandemic’s acceleration of technology adoption
We expect to see strong demand in the warehouse
and construction continued to attract the largest share of and 'digital first' approaches to business has also increased
investment, with USD205 million spent across nine deals in
and logistics segment of the real estate market in The innovation and technology sector has been a bellwether the appetite for M&A in this sector, driven by consolidation
2020. 2021, although it remains to be seen how the office of Ukrainian M&A trends this year, with 13 deals announced and vertical integration as companies look to acquire
and retail segments will fare in the face of the ‘new in 2020 worth a combined USD184 million. Although the (rather than build) technology solutions in the race to stay
The largest deal in the real estate sector saw Dragon Capital value of deals decreased by 53 percent, the volume of
once again increase its portfolio of prime office space by
normal’ for remote working and e-commerce. competitive and relevant to customers.
transactions was up by 18 percent.
more than 38,000 m2 through its March acquisition of Kyiv’s Although outside the methodology of the M&A Radar, it
101 Tower for USD110 million; the only deal in the office During 2020, almost 70 percent of deals (nine deals) in the is worth highlighting that there were also 38 transactions
Both the volume and total value of deals in the Real Estate &
segment in 2020. innovations and technology sector were made by foreign in the innovation and technology sector in 2020 valued at
Construction sector had been rising strongly in recent years, as
private-equity and venture-capital funds located in North less than USD5 million each. These smaller deals were
In hospitality real estate, the State Property Fund of Ukraine Ukraine opened up more to investors and started to invest more
America and Europe. Aside from Restream’s USD50 million collectively worth USD109 million, demonstrating the
completed the country’s largest privatisation to date in in domestic infrastructure.
fundraising, US based Quadient acquired YayPay, a Ukraine underlying strength of the sector.
July; when Smartland won the auction of Kyiv’s landmark However, activity fell sharply as a result of the pandemic SaaS accounts receivable platform, for USD20 million. Other
Dnipro Hotel with a bid of USD41 million. Smartland owner due mainly to the dramatic collapse in the market for notable deals in the sector included:
Alexander Kokhanovskyy plans to invest a further USD20 office space (down from nine transactions in 2019 to one — London-based venture capital fund Hoxton Ventures
million to turn the hotel into Ukraine’s first multifunctional transaction in 2020). Nonetheless, we observed activity invested USD10 million into Preply.com; a US-
esports arena. in the warehouse real estate market in 2020 and at the headquartered business with its major operations based
beginning of 2021, caused by the rapid development of in Ukraine and which has quickly established itself as a
e-commerce and subsequent changes in supply chains. leading portal to match language tutors with clients.
— Chernovetskyi Investment Group, one of the largest
Taking into account the low vacancy rate in the warehouse real
venture capital groups in Eastern Europe, invested USD6
estate market and new trends caused by the pandemic, we
million into Zakaz.ua, a company which provides grocery
believe there will be increased interest and activity in this sector
delivery services to major Ukrainian supermarkets.
in the coming year and beyond.
© 2021 KPMG-Ukraine Ltd. All rights reserved. © 2021 KPMG-Ukraine Ltd. All rights reserved.22 M&A Radar 2020: Ukraine M&A Radar 2020: Ukraine 23
Agriculture Transport and Infrastructure
24% 13% 9% pts 108% 100% 14% pts 5% pts
$170 m 13 18% 19% $164 m 6 18% 9%
Deal value Deal volume Share of Ukrainian Share of Ukrainian Deal value Deal volume Share of Ukrainian Share of Ukrainian
deal value deal volume deal value deal volume
Agriculture remains a powerhouse of the Land reforms have enabled The transport and infrastructure sector was January 2020 marked the dawn of public-private
Ukrainian economy and a key target for domestic and foreign companies one of the most sought after sectors in 2020, partnerships (PPP) in Ukraine; something the
domestic and foreign deal-makers to acquire land in Ukraine, already benefitting from both ongoing and planned country’s government had been discussing for
opening up the country’s lucrative government initiatives. two decades.
agriculture and food processing
Significant investment into the sector over recent years by
both domestic and international investors has seen new
sectors to investors. The Infrastructure Ministry’s concessions for Kherson
These projects aim to attract private investment to
farming practices and technologies employed to drive modernise Ukraine’s ageing infrastructure and develop new and Olvia seaports attracted both Ukrainian and foreign
efficiency gains and improve yields. international transport corridors. investors, with seven companies competing in the final
Multinational companies are expected to invest more in tender. Risoil-Kherson, a Swiss-Georgian consortium, won
However, adverse weather and an abnormal drought in 2020 2021, both to source produce for other markets and to As a result, transport and infrastructure was the fourth the 30-year concession for Kherson seaport which handles
brought two consecutive years of record Ukrainian harvests process produce for the domestic market. Ukraine is already largest sector in 2020, attracting USD164 million into six both Dnieper River and Black Sea cargo.
to an abrupt end. a big producer and exporter of grains but reforms should deals. Deal-making was dominated by foreign investors,
allow for greater diversification. including the USD130 million, acquisition of a 51 percent QTerminals, a joint venture between Mwani Qatar and
Grain was particularly badly hit, with the 65.4 million tonnes
stake in the TIS Container Terminal by DP World, a Milaha which operates Qatar’s Hamad Port, won a 35-
harvested reflecting a 13 percent percent drop on the prior year. Although the sector has seen a more than 40 percent
multinational logistics firm which operates 123 businesses year concession for Ukraine’s Olvia seaport on the Black
However, despite Ukraine's main export crops of wheat and decline in the deal volume since 2018, we anticipate that
across 54 countries. Sea. Not only do these PPPs provide income to the State
corn being amongst the worst affected by the weather, Ukraine deal volumes will return relatively quickly; especially as the from concession payments*, they will also enable vital
remained the world’s second-largest corn exporter in 2020. land reform process continues. Although shipping volumes fell by approximately 10 percent investment to modernise the ports and local infrastructure.
in 2020, mainly due to lockdown restrictions, optimism
about growth in shipping volumes through Ukraine’s ports Risoil-Kherson plans to invest at least UAH216 million
Although the long-awaited land reform law (USD7.7 million) in the first ten years of their concession,
in recent years (up 20 percent in 2019) was instrumental in
adopted by the Ukrainian government in Number of deals by segment influencing further investment. while QTerminals will invest UAH3.4 billion (USD120 million)
2020 struck a compromise among competing over the first five years of Olvia seaport’s operation.
Risoil S.A., a Swiss business which already operates the
interests in the country, it may well be the first
largest bulk liquid terminals in the Black Sea at Odesa’s
step towards a free land market. Chornomorsk Merchant Sea Port, made the decision to
2 acquire two further terminals at the beginning of the year
The law, which came into effect on 1 July 2020, relaxes based on expectations of further growth to come: TK Exim
Land
land ownership rules for Ukrainian owned businesses and Oil and Boconti Ukraine. Glencore Agriculture Limited
Grain elevators
provides the opportunity for international companies to 6 likewise acquired EVERI Ltd, a terminal operator in Mykolaiv,
3 Processing plants from the OREXIM Group of Companies for an undisclosed
lease land for up to 50 years.
Other consideration.
Over the course of 2020, agriculture accounted for almost
one-tenth of the total value and one-fifth the total volume 2
of Ukrainian M&A. Land bank acquisitions accounted for
six deals in the sector, including those by Epicentr K and
Agartha Fund LP which were amongst the ten largest
Ukrainian M&A deals of 2020.
Elsewhere, SAS Investcompagnie, a little-known French
company established in 2018, acquired 71,000 hectares of
land held by three Ukrainian agricultural enterprises; Agrikor
Holding, Agroprime Holding, and Agrovit, for an undisclosed
sum. Outside of land, Cargill acquired Neptune, a Black Sea
deepwater grain terminal with capacity of up to 290,000
tonnes, also for an undisclosed sum.
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Transport and Infrastructure Infrastructure: driving
After becoming one of the most sought after
economic growth
sectors in 2020, the outlook for Ukrainian Volodymyr Marchuk
transport and infrastructure looks bright. Associate Director,
Deal Advisory,
Infrastructure,
Ukrainian transport infrastructure has suffered from Number of deals by segment KPMG in Ukraine
underinvestment for decades and needs to be improved
and expanded to support the country’s ambitious economic
plans. It is therefore no surprise that the Ukrainian After years of sustained neglect, Ukrainian
government has confirmed that this sector is a priority for infrastructure stands before a possible tidal
development and one which international finance agencies 1 wave of investment, spurred on by long awaited
say they are looking to fund. regulatory changes and the commitment of
Terminal operator
Ukraine’s geographic location, combined with recent international finance agencies to propel the
1 Public transportation
logistical developments such as a twice-weekly rail freight country toward its true economic potential
service connecting European and Asian destinations and the Logistics company
4
‘Black Sea to Baltic’ international intermodal corridor, makes
the country an important transit route for trade and travel
between Europe, Asia and the Middle East. There is much to be said about unlocking the potential for
modern, efficient and reliable infrastructure in Ukraine. Ukraine has a viable portfolio of potential
We expect that this growth in traffic, encouraged by Infrastructure is the backbone of a healthy economy; it infrastructure projects to support the country’s
companies looking to Ukraine as an option to decouple powers businesses, connects cities, and enables the
supply chains from Asia, will drive further investment in the
economic development and integration into
flow of goods and services within and beyond a country’s
country’s transport and infrastructure sector. borders. Situated at the crossroads between Europe and Europe.
Asia, Ukraine is well positioned to reap the benefits of
The Ukrainian government and International Finance
investment needed in the region to support global trade and
Corporation (IFC) are launching a long-term public-private Provided the Ukrainian government continues on the path
the decoupling of the supply chains.
partnership programme for roads, including six pilot projects of reform, this should ensure the support of the European
worth over USD1.5 billion. Public private partnership, Union and international development agencies such as the
combined with plans for air, sea and river port concessions EBRD, EIB, and IFC.
Structural changes in how we live, work and
in 2021 and beyond, are expected to drive investment in the In 2021, we expect positive dynamics in terms of the
sector.
spend our time and money will influence future
recovery of freight traffic volumes to pre-crisis levels but
demand for different modes of transport. also expect some changes in terms of the mixed mode of
transportation due to ongoing pandemic related restrictions.
Add to this the desire for energy independence, food The upcoming integration of Ukraine into existing
security, and efforts to de-risk global supply chains by international infrastructure and routes, specifically those in
developing regional supply models, and it’s clear to see the Europe and the EU, must also take into account potential
factors that will influence capital allocation into associated new environmental restrictions and policy alignment to
infrastructure. harmonise with EU standards. Examples of policy alignment
On top of these existing pressures, the recovery of rail include ‘carbon neutral’, road safety, and electric vehicle
and air passenger traffic will depend on how the pandemic charging commitments; all of which will require additional
unfolds in 2021, as well as the speed and effectiveness of infrastructure investment.
the vaccination rollout.
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Infrastructure: key projects Air transport
PPPs are being considered for four regional
airports. Lviv, Chernivtsi, Rivne, and Kherson.
These airports will collectively benefit from USD430 million worth of
investment for 30-year concession deals.
Ukraine's Ministry of Infrastructure In total, 13 existing regional airports have been earmarked for
envisages USD20 to 25 billion of reconstruction and there are plans for a new airport to be constructed
in Transcarpathia.
infrastructure investment up to
b
2030, of which half is expected to Poland Boryspil Airport will also concentrate on reconstruction of the western
Poland border runway and benefit from total investments estimated at over EUR350
come from private investors. Yahodyn Kovel M-19
million, including a EUR270 million loan from the European Investment
Ustulug
Gdansk, Lutsk Bank (EIB).
H-22 Rivne M-06
Kyiv
Gdynia S-19
Eastern Kyiv
Access Zhytomyr Ring Road Boryspil
‘Dry Port’ North
A-4 а Bypass
Bila Tserkva Kharkiv
Rostock, Hamburg, Korczowa-
Krakovets Ternopil M-03
Seaports Rotterdam
с Lviv Khmelnytskyi
Reshetylivka
Sknyliv M-05 Poltava
Air transport Mostaska Stryi GO Highway
Slovakia Н-01
Railway station Kremenchuk
Bratislava, Ivano-Frankivsk
Kremenchuk H-31
Develop or Vienna, Prague R-2 Bypass M-29
L’viv-Striy- H-10 Vinnytsya
reconstruction Mukachevo- Uman
railway projects Dyida Kropivnytskiy Bridge over Dnieper Dnipro
Chop
Hungary Dyida
in Kremenchuk
Roads Chernivtsi
M-04
d
M-3 Kriviy Rih Zaporizhzhya
Bridge over Н-14
Moldova Pivdenny Buh
Rijeka, Piraeus
Genoa, Marseille Romania H-11
Mariupol
Mykolaiv
Berdyansk
Olvia M-14
Rail
Kherson
Plans to increase rail infrastructure Chornomorsk
development aim to attract investments from Bilhorod-
Odesa
Gold arch
Skadovsk Roads
both international financial institutions and Dnistrovskyi The GO Highway project: part of the Trans-
private investors for the following objects: Izmail European Transport Network (TEN-T) and
— Commissioning seven passenger stations on concession: Kyiv, Reni Ust- intermodal Southern Silk Road route.
Dunaisk
Chop, Mykolaiv, Vinnytsia, Dnipro, Kharkiv, Khmelnytskyi;
Between 2023 and 2025, the Ukrainian government plans to launch
— Purchase electric freight locomotives to renew Ukrzaliznytsia PPPs for toll roads with projects in Kyiv alone covering up to 1,600 km
rolling stock, by 2025. Total investment: USD1.4 billion; and requiring up to USD3 billion of investment.
— Kyiv Urban Electric Train development, to 2025. Total investment: Construction, reconstruction and capital repair of 1,746 km of
USD298 million; Seaports road infrastructure from Odesa (Ukraine) to Gdansk (Poland). Total
Following successful tenders for investment: +USD2.3 billion.
— Railway infrastructure development and regional reconstruction
projects (2021 – 2024). Total investment: USD106 million;* concessions of the Kherson and Kyiv Ring Road reconstruction (between M-05 and M-06). Total
Olvia seaports, the government plans investment: +USD400 million.
— Transport hub development in Kovel and Chop; one of the key portconcessions for Chornomorsk,
Western crossings in Ukraine. Total investment:USD32 million.** Repair of 10 key road sections, including 6 pilot road PPPs supported
Odesa, Berdyansk, Mariupol, Reni, Izmail, as well as the by the International Finance Corporation (IFCS). Total investment:
privatisation of stevedoring companies in the ports of: Bilhorod- USD1.5 billion.
*Includes: Dnistrovskyi, Ust-Dunaisk and Skadovsk.
(a) construction of a ‘Dry Port’ logistics hub on the Polish Border in the Lviv region named Kremenchuk bypass road development, M-22 Poltava - Oleksandriya
‘Mostyska 2’, (b)reconstruction and electrification of the ‘Kovel-Yahodyn-Poland border’ railway in In total, 13 concessions are expected to draw USD1.8 billion in
route reconstruction, Dnieper River bridge (total length: 35 km). Total
the Volyn region, (c)reconstruction of the ‘Mostaska-Sknyliv’ railway, (d)development of a railway private investment in the period to 2038, according to a new
bridge for the ‘Kryvyi Rih and Kryvyi Rih-Western Line’; investment: USD720 million.
Seaports Development Strategy approved by the Cabinet of
** This development of the ‘East-West Gate’ will enable transport links with Slovakia and
Hungary via the Hungarian rail terminal in Fényeslitke (currently under construction).
Ministers. Pivdennyi Buh bridge, Mykolaiv. Total investment: +USD2 billion.
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