Tech: the Driving Force Behind Acquisitions in Hungary

The technology sector remains the most popular investment destination in Hungary in 2021. Meanwhile, an increasing proportion of Hungarian companies are expanding abroad, according to a survey by the financial markets consultancy firm Ernst & Young (EY).

In the past year, 132 deals worth a total of USD 4.64 billion were announced in Hungary. The number of deals shows a 25% increase, while their combined value is down 19% compared to 105 announcements in 2020, which totaled USD 5.69 billion, the business news site napi.hu reports.

Last year, technology acquisitions continued to dominate the market. The sector saw 18 deals announced, followed by energy (13), manufacturing (13), finance (11 deals), real estate (10 deals) and healthcare (7 deals).

"Strengthening technological capabilities continues to be the main driver for domestic acquisitions, as digital services and solutions are now a core requirement in all sectors. The market results confirm that in many cases, companies can acquire these skills and capabilities through acquisitions," Márton Paulovits, Director of M&A at EY said.

The expert added that whether on the sell-side or the buy-side, it makes sense to work with an advisor who knows the market well, as decision-makers have to navigate through significant uncertainties due to geopolitical tensions, unpredictable stock market movements and rising commodity and energy prices.

According to EY's analysis, the Hungarian market will continue to be driven by domestic transactions in 2021 (40%), but the share of foreign investment by domestic firms has almost doubled compared to 2020 (30%).