EY M&A Barometer: In 2016 Slovakia saw a decline in the number of deals, copying the prevailing trend in the region

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1 News release Contact: Katarína Sekulová EY Tel.: Mobile: EY M&A Barometer: In 2016 Slovakia saw a decline in the number of deals, copying the prevailing trend in the region Number of closed M&A transactions in the CSE region: 1,165 Top three countries by number of transactions: Czech Republic, Turkey, Poland The most active industries in CSE (by volume): IT, Manufacturing and Services Compared with 2015, the total number of transactions in the CSE region decreased; however, their estimated value increased. Bratislava 27 March 2017 According to the CSE M&A Barometer prepared by EY, 2016 was slightly weaker than the previous year in terms of the number of M&A transactions in the Central and South Eastern European (CSE) region. Overall, 1,165 transactions were completed in the CSE region, representing a 9% decrease, year-on-year. The Czech Republic was the most active country in terms of deal volume, followed by Turkey and Poland. The IT sector was the most active target industry in the CSE region for a third consecutive year. M&A transactions in CSE In 2016, the total number of transactions closed in the CSE region (Bulgaria, Croatia, Czech Republic, Greece, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey) was 1,165, with a total estimated market size of US$47.7b. The number of transactions decreased by 9% compared with This drop was mainly due to the decreased activity of investors in Poland, Turkey, Serbia as well as other countries. Despite the overall decrease in the number of closed transactions, the estimated deal value increased by almost 11%. This increase may be mainly attributed to the rise in the average size of deals over US$100m as well as mega deals over US$1.000m, says Matej Bošňák, EY Slovakia s Country Managing Partner and Head of Transaction Advisory Services.

2 Page 2 Closing 288 transactions, the region was dominated by the Czech Republic. It was followed by Turkey which ranked second with 273 transactions and Poland which managed to stay in the top three most active countries with 216 transactions. Only three of the countries Czech Republic, Croatia and Greece experienced an increase in terms of the number of transactions. Considering the estimated M&A market volume, Poland ranked first with transactions value totaling US$11.6b, experiencing an almost 54% increase on the previous year, followed by the Czech Republic with US$9.9b and Turkey with US$7.3b. Direction of transactions Domestic transactions continued to represent the majority in the CSE transaction market, as in 52% of the total number of deals, the buyer and the target originated from the same country. Domestic transactions were most popular in the Czech Republic (68%) and Hungary (54%). Turkey and Poland had the most outbound transactions with 48 and 30 deals respectively, followed by the Czech Republic with 26 deals. Investor population strategic and financial The vast majority of transactions in all countries were closed by strategic investors, resulting in an unchanged overall proportion of 78% in the CSE region. In Croatia, 93% of the transactions were performed by strategic investors. The share of financial investors was the highest in Slovakia and Hungary. Sector analysis The IT sector was the most active target industry (by number of transactions), accounting for 189 transactions in 2016 and 16% of all transactions, and ranking first in most of the countries. This was followed by Manufacturing and Services. The largest transaction in the IT sector was the acquisition of the Polish Allegro SA by Cinven, Permira a Mid Europa Partners consortium * for US$3,250m. It thus also became the largest transaction in the history of Polish Internet firms. In terms of value, the largest transaction, also well-known in Slovakia, occurred in the food and beverage sector, where Japanese Asahi Group Holding s * bought a group of Eastern- European beer brands from Anheuser-Busch InBev for US$7.8b. * Transactions are subject to customary regulatory and antitrust approvals, and are expected to be completed in *

3 Page 3 Foreign interest Although there were fewer foreign inbound deals compared with domestic deals, in terms of the origin of foreign capital invested in CSE by M&A transactions, Western European and non- European investors continued to lead against investors from CSE countries in The US was the most active in 2016, closing 45 deals in the region, followed by Germany (33) and the UK (31). Slovak Republic In terms of deal volume, 2016 was the weakest year for Slovakia in the last four years. During 2016, investors closed a total of 41 transactions in Slovakia. As a result, Slovakia experienced a year-on-year decline of almost 37% and ranked sixth in the CSE region in terms of the number of transactions. The largest transaction closed last year in Slovakia was an increase in the shareholding of the Chinese private investor, CEFC China Energy Company Limited, in the financial group J&T Finance Group SE (JTFG) to 50%. CEFC China Energy Company Limited is mainly active in the area of finance, energy and industry. It is the biggest private enterprise in Shanghai and the sixth largest private enterprise in China. Considering the direction of transactions, the situation in Slovakia did not change significantly in Foreign investors continued to be the most active, experiencing a slight decrease in their share on the previous year, from 63% to 52%. High interest in Slovak companies was mainly indicated by Czech investors. Investments of domestic investors accounted for 24% of the total number of transactions. On the other hand, compared with last year, the activity of Slovak investors in foreign countries increased, resulting in a rise in the share of these investments from 14% to 24%. The vast majority of deals were closed by strategic investors in all CSE countries and this was no different for Slovakia. Nevertheless, the activity of foreign investors in Slovakia increased year-on-year when compared to the activity of strategic investors. Although the vast majority of transactions were closed by strategic investors in 2016, the analysis points to increased interest from financial investors in that year. We experienced a year-on-year increase in their activity on the market from 9 to 13 transactions, which represents an increase in the financial investors share in the total number of deals from 14%

4 Page 4 to 32%, explains Peter Demský, EY Slovakia's Director of Transactions Advisory Services, responsible for mergers and acquisitions. The most active target industry was Banking and Financial Services, dominating in both monitored areas, in the number as well as the value of closed deals. Top ten largest transactions in CSE in 2016 Target Country of target Buyer Country of buyer Value (US$m) 1 CEE Business of Anheuser-Busch InBev* Czech Republic, Poland, Hungary, Slovakia, Romania Asahi Group Holdings Japan 7,800 2 Allegro S.A.* Poland Cinven, Permira, Mid Europa Partners United Kingdom 3,250 3 PointPark Properties s.r.o. Czech Republic GIC Private Limited Singapore 2,675 4 Pekao S.A.* Poland PZU S.A., Polish Development Fund S.A. Poland 2,555 5 EP Infrastructure, a.s. Czech Republic Macquire Infrastructure and Real Assets Australia 1,648 6 AVG Technologies N.V. Netherlands AVAST Software s.r.o. Czech Republic 1,365 7 J&T Finance Group SE Slovakia CEFC China Energy Company Limited China Multimedia Polska S.A.* Poland UPC Polska United Kingdom Mars Entertainment Group Turkey CJ-CGV South Korea KMG International N.V. Romania CEFC China Energy Company Limited China 680 * Transactions are subject to customary regulatory and antitrust approvals, and are expected to be completed in Source: EY M&A Barometer

5 Page 5 About the survey In our M&A Barometer, we analyze publicly disclosed information accumulated from reputable databases, such as DealWatch, Mergermarket, Capital IQ, Zephyr and our own EY databases. We analyzed data of 11 countries of the Central and South Eastern European region: Bulgaria, Croatia, Czech Republic, Greece, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey. M&A activity and data includes not only closed, but also new and announced private to private transactions and excludes: acquisitions of minority stakes below 15%, majority shareholder s further acquisition of a minority interest, real estate transactions (except when the target or buyer was a real estate company or real estate fund), capital market transactions, acquisitions of licenses, joint venture agreements, greenfield investments, IPOs, privatizations, multi-country deals (the value of these deals was ignored in each country, but the number was included) and internal reorganizations. About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.