The Polish transaction market in the tough new economic reality is growing and attracting unflagging interest from investors. Poland ranked first in Central and Eastern Europe in both the number and value of M&A deals between 2020 and 2022. We asked investors to identify the main factors they consider when choosing an acquisition target, how they carry out deals, and how they think the market will look in the near future. The report was launched in September 2023.
Key findings
The growing importance lies in the quality of management for adapting the company to unpredictable events or gaining access to employees with relevant industry experience.
The main investment motive for strategic investors is acquisition of a customer portfolio, distribution channel, or product/service portfolio. For financial investors, the key motives are profit on the planned resale and industry consolidation within their investment portfolio.
New technologies are the sector seen as the most attractive for capital investment, according to both strategic and financial investors. We can also expect to see the most deals in the coming months in e-commerce, IT, healthcare, and renewable energy.
Polish transaction market
In the CEE region, Poland once again stood out as a major M&A market. Despite many economic challenges, it ultimately proved to be strong and resilient to turbulence from inflation and energy prices. The value of deals reached its highest level in a decade, at PLN 74.9 billion (EUR 16 billion), up by a third from 2021, with the merger of state-owned energy companies accounting for a large part of this value. Although there were slightly fewer transactions categorized as very large-value than in 2021, eight of them exceeded EUR 300 million. Despite the decrease in the number of transactions compared to the previous year, Poland still proved to be the most active territory in Central and Eastern Europe, with the number of M&A deals fluctuating around 340.
Specifics of M&A transactions in Poland
The features and specifics of transaction processes in Poland are shaped by the environment of the entities carrying them out and the internal conditions prevailing in both the acquiring and purchased companies. The KPMG survey in Poland shows that:
1The number of months needed to complete an M&A transaction on the Polish market from the date of first contact to signing of an SPA takes an average of 10 months.
2The most common way to identify an acquisition target is through an internal identification and selection process—this was indicated by 60% of respondents in the strategic investor group and more than 71% among financial investors.
3Mature and growth-stage companies are the most attractive targets, as perceived by investors.
4The main reasons for walking away from a contemplated transaction are the seller's overly high price expectations, changing economic environment or industry outlook and significant problems or risks identified during due diligence.
Impact of the global economic on M&A market
The macroeconomic environment and the possibility of a recession in the coming months are likely to negatively affect the M&A market, but in the medium term the outlook is more optimistic. Further development of the M&A market will depend on the availability of raw materials, energy prices, inflation, and the still ongoing war in Ukraine. Many aspects of M&A processes impacted by global events have been re-evaluated in recent years. The growing importance lies in the quality of management for adapting the company to unpredictable events or gaining access to employees with relevant industry experience. The use of new technologies in production and service delivery, as well as bringing the business into compliance with ESG criteria, is increasingly important.
M&A processes in Poland
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