Breakingviews: Mol puts Hungary on the takeover map

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Breakingviews: Mol puts Hungary on the takeover map

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Accession to the European Union on May 1 will not bring instant wealth to the eight central European applicant states. But it might bring more deals for investment bankers.

Much of the corporate activity since the fall of the Berlin Wall has been aimed at bringing in foreign investment and pump-priming local capital markets. Although that process is fairly advanced in the major central European states, it is still continuing as states release their grip on strategically sensitive assets.

Hungary, for example, is selling a majority stake in Dunaferr, the country's largest steelworks. And the Czech government is tempted to sell down its 51% stake in Cesky Telecom, following the successful recent placement by Swisscom and KPN of a 27% holding in the telecom company.

Another growing trend is consolidation in key sectors. This is partly about creating the added scale necessary to compete with western firms in more competitive markets. But it is also being driven by a desire to bulk up and to fend off potential bidders.

Hungarian oil company Mol is a good example of how this process might unfold. The company is no stranger to deals.

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