+3% increase Number of transactions 66

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1 M&A Barometer Hungary 2017

2 EY M&A Barometer is a summary and analysis of publicly disclosed information accumulated from own research and reputable databases. M&A activity and data includes private to private transactions and excludes: 4 Acquisitions of minority stakes below 15% 4 Majority shareholder further acquisition of minority interest 4 Real estate transactions (except when the target or buyer was a real estate company or real estate fund) 4 Capital market transactions (except for transactions that resulted in a change of control) 4 Acquisitions of licenses 4 Joint venture agreements 4 Greenfield investments 4 IPOs 4 Privatizations 4 Multi country deals (value of these deals was ignored in each country, but the number was included) 4 Internal reorganizations Key findings +12% Value of Hungarian M&A market 0.98 US$b +3% increase 66 3rd most active period since 2011 Increasing M&A market in Hungary in 2017 Real estate became the most active sector ahead of Food and beverages 66 deals were publicly disclosed in Hungary in 2017, which represents 3% increase compared with 2016 and 43% increase from The estimated value of the M&A market increased by 12% in terms of value versus 2016 and increased by 32% versus Unlike previous years Real estate was the most active industry in Hungary. Number of M&A transactions increased to 66 in Hungary In 2017, 66 deals were disclosed and published in Hungary, reflecting 3% increase compared with Since 2011 (69 deals), this has been the third most active period, in terms of the number of publicly disclosed transactions. Estimated value of the M&A market - US$0.98b Transaction values were disclosed and published in 15% of the deals (10), less than 2016 of 34%. The annually decreasing disclosure rate is due to the lower number of financial investments supported by the JEREMIE program, where deal values are required to be disclosed. Based on the publicly available information, the estimated value of the Hungarian M&A market was US$0.98b. This represents 12% increase from US$0.87b in 2016 and a 32% increase from US$0.74b in The average value of deals with a disclosed deal value below US$100m increased to US$11.7m in 2017, which represents more than 200% increase from US$3.7m in This growth was due to the increased activity in the real estate market where the largest transactions were closed. 2 M&A Barometer - Hungary 2017

3 The Hungarian M&A market US$b Estimated market size (US$b) Local deals and strategic investors dominate the market In 2017, the Hungarian M&A market was dominated by domestic transactions as in previous years. The share of domestic transactions, where both the target and buyer were Hungarian entities, increased to 59%. The most frequent origin of inbound investments includes Austria (5 deals), the UK (4 deals) and the US (3 deals). Only four publicly disclosed outbound transactions were noted in 2017, one of them being the acquisition of Latvian Infogram, that specializes in the development of web-based data visualization applications, by the cloud-based presentation software provider Prezi. In line with the previous year, strategic investors were in majority in Hungary in Approximately 65% of the deals were performed by strategic investors. Proportion of financial investors (35%) is still high compared with other countries in the region. Inbound 35% Outbound 9% Inbound 35% Outbound 6% Domestic 56% Domestic 59% Type of investors Financial Strategic M&A Barometer - Hungary

4 Number of deals by industry in 2017 Real Estate 24% Agricultural 6% Other 3% Food and beverages 15% Energy and mining 6% Retail & Wholesale 3% Services 9% IT and Technology 5% Banking and Financial services 2% Telecom & Media 9% Publishing and printing 5% Chemicals 2% Manufacturing 8% Pharmaceuticals and health care 3% Construction 2% Real estate became the most active sector, followed by Food & beverages, Services and Telecom & media sectors Real estate Real estate became the most active sector in 2017 with 16 deals compared with six deals a year ago. Transactions included the purchase of the centrally located prestigious office building of Mercury Palace in Budapest by the Vienna-based investment manager GalCap Europe and the acquisition of the 25,300 m2 Váci Greens Building B by Hungarian property investor OTP Ingatlan Befektetési Alapkezelő Zrt. from the Belgian Atenor Group. The Real estate sector was dominated by financial deals (56%) in terms of the number of transactions and nine out of 16 transactions were performed by foreign investors mainly from the UK, the Czech Republic and Austria. Food & beverages There were ten transactions published in the Food and beverages sector in 2017, increasing from three during the same period in Nine out of ten transactions were performed by domestic investors and 60% of the deals were closed by strategic investors. Deals included the acquisition of the Hungarian cereal products maker Agromill-Food Kft. by the owner of Cerbona Élelmiszeripari Kft. and the Belgium-based La Lorraine Bakery Group has acquired 24% stake in the Hungary-based bakeries producer Első Magyar Pékpont-rendszer Kft. Financial terms of the deals remained undisclosed. Services Six transactions were published in the Services sector in 2017 with domestic and inbound transactions equally. Transactions included, amongst others, the acquisition of Sziget Kulturális Menedzser Iroda Kft. by US global investment firm Providence Equity Partners L.L.C. and the acquisition of Veiki-VNL Kft. that delivers laboratory services and product testing in the high voltage electricity industry by the German vehicle inspection company Dekra SE. 4 M&A Barometer - Hungary 2017

5 Telecom & media In 2017, six transactions were published in the Telecom and media sector including the sale of Invitel Zrt. to China CEE Investment Co-operation Fund for approximately US$215m - being the largest transaction during the first half of Contacts This sector was dominated by Hungarian investors, as four out of six transactions were performed by domestic strategic investors. Manufacturing There were five transactions publicly disclosed in the Manufacturing sector in 2017 decreasing from 11 in Transactions included one of the largest Ukrainian ferroconcrete producer company 3 Betony TzOV s acquisition by KÉSZ and the sale of the industrial tubing manufacturer, Dynamic Technologies Kft. to the Luxembourg based International Auto OEM Supplier Luxco S.a.r.l. In this sector, the share of strategic and financial investors were 80% and 20% respectively. Margaret Dezse margaret.dezse@hu.ey.com Ferenc Geist ferenc.geist@hu.ey.com Transactions with State involvement in 2017* The Hungarian State s activity increased on the Hungarian M&A market in 2017 compared with the previous year. Transactions included amongst others the 100% takeover of DÉMÁSZ by the First National Public Utility company, ENKSZ from French EDF and MVM, the stateowned Hungarian energy group, has via capital raise become a 50% owner of ENKSZ. Also noteworthy is the fact that while in 2016 the State was rather on the sell-side, in 2017 it acted mainly as a buyer. During 2017 none of the state involvement transactions deal value was public. Please note that this transaction has not been included in the analysis of the M&A market and the above deal numbers. Ferenc Nagy ferenc.nagy@hu.ey.com Virág Dezső virag.dezso@hu.ey.com Four largest transactions in Hungary in 2017 (US$m) Target Country of target Buyer Country of buyer Value (US$) Invitel Zrt. Hungary China-CEE Investment Cooperation Fund, CEE Equity Partners Poland, China Sofitel Budapest Chain Bridge Hungary Accor-Pannonia Hotels Zrt, Orbis SA Hungary, Poland 47.1 MAK Mecsek Hungary Autópálya Koncessziós Zrt. Intertoll-Europe Zrt, STRABAG SE Hungary, Austria 28.3 Exe Danube Hotel 4* Hungary Internos Global Investors UK 15.9 M&A Barometer - Hungary

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