The ongoing Russia-Ukraine conflict is expected to affect the completion of announced or planned cross-border mergers and acquisitions (M&A) deals involving targets based in Russia or Ukraine, according to GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Financial Deals Database reveals that, 13 cross-border M&A deals involving acquisition targets based in Russia or Ukraine were planned or announced during the last six months. However, the fate of these deals is now in limbo as completion of some of these is likely to be delayed while some may even be called off.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The deal-making fundamentals remain unconducive for foreign acquirers at least for the near future as no buyer likes uncertainty and market volatility. Market volatility and an uncertain business environment on the back of the ongoing war may prompt foreign buyers eyeing Russian or Ukrainian targets to withdraw or revisit their acquisition strategies.”

Interestingly, some companies withdrew from such deals even before Russia’s military attack on Ukraine. For instance, UniCredit withdrew from a deal to acquire Russia-based Otkritie FC Bank citing escalation in tensions between Russia and Ukraine as the prime reason.

Other deals involving Russian acquisition targets such as Arifmetika, RosExpert, Academy IT, SmartDeal, MMTR Technology and BaltTransServis, and Ukranian targets including Agricultural Enterprises, BTA Bank, Petro Consulting, Perfectial and World Executive Partners could also be at stake.

Bose adds: “The ripple effects of the sanctions are expected to be felt strongly across financial markets with foreign acquirers, specifically those headquartered in NATO countries, finding it difficult to go ahead with their announced or planned acquisitions of Russian targets while some may consider shelving their plans on hold for now with the prevailing uncertainty around the situation. For instance, Citigroup’s sale of its Russian business to Russian state bank VTB is expected to hit a roadblock.”

Other companies that announced plans to sell their Russia assets include Repsol SA, HDI International AG.

Bose concludes: “GlobalData sees more M&A plans getting shelved until the situation improves. Meanwhile, despite the prevailing uncertainty and market volatility, the crisis could also present some opportunities for buyers as they can get good deals with the valuation of acquisition targets in Russia and Ukraine likely to remain low.”