Updated July 14, 2008

   Analysis agencies Dealogic and Thomson Financial summed up activity results of investment banks at mergers and acquisitions market (M&A) in the first 2008 half-year. Russian investment banks have significantly improved their positions in the final rating over the Eastern Europe. Their participation in energy companies’ consultations within RAO UES of Russia reorganization has played the major role.

   According to Dealogic agency data, Credit Suisse bank became the M&A market leader over the Eastern Europe, as its specialists were consultants in 15 deals at $33,106 billion volume. Top 10 comprises three Russia’s investment banks: Renaissance Capital, Metropol Investment Financial Company and Otkrutie Financial Corporation. Thus, Otkrutie FC became the leader by deals number where it acted as a consultant – 47. Merrill Lynch has taken leading position in Thomson Financial eastern european rating, though, as per this agency rating version, top 10 comprises three Russia’s investment banks as well: KIT Finance, Metropol IFC and Troika Dialog. Metropol IFC has taken leading position by deals number – 30. In Dealogic and Thomson Financial explain results difference by various methods of ratings preparation. However, similar ratings do not always assess objectively investment banks’ positions. "Sometimes within M&A market ratings banks are added deals where they have acted only nominally", marks deputy head of Renaissance Capital investment banking management Alexander Merzlenko.

   In the first half-year Russia’s investment banks have significantly improved their positions in ratings. As compared to the analogical period last year, KIT Finance was placed 25 in eastern european rating, Metropol IFC – 39 and Troika Dialog – 54. However, there has been a steady tendency lately: companies prefer the Russian investment banks when choose their consultants. "M&A is the business built both on services’ quality and on personal relations of clients and consultants", explains executive director of Troika Dialog investment banking department Andrey Burlinov. "Russian investment banks are closer to a client, as they focus on the Russian region mainly as compared to foreign competitors". Moreover, on the background of the country economy growth, in Russia take place active processes of mergers and acquisitions in infrastructure projects area. "It enables Russia’s banks to rush into the European elite", marks Otkrutie FC top-managing director Mikhail Sukhobok.

   "Quite often some single deals can influence banks positions in ratings of M&A market", explains Alexander Merzlenko. For instance, in the first half last year top positions of the rating placed banks that had consulted Rosneft at Yukos assets’ purchase. This year Russia’s investment banks were placed in the rating due to participation in energy sector deals of M&A mainly. They acted as consultants within RAO UES of Russia reorganization. Moreover, Renaissance Capital and Troika Dialog participated in some large deals in oil and gas and consumers’ sectors.

   As experts suppose, in the second half-year situation in the rating can change significantly. "There will be some deals in the electric-power sector as well. However, activity in this industry will gradually cut", is sure Andrey Burlinov. Experts consent that in the nearest future activity in metallurgical sector of M&A market can grow, due to possible consolidation of Norilsk Nickel MMC, UC Rusal and Metalloinvest assets.

Top-10 of investment banks by M&A deals volume in the Eastern Europe by first half-year results