M&A activity has entered a new, exceptional period. In Poland, the economic crisis is just beginning, with inflation now exceeding 14% (the European average is 9%) and the slowdown in economic growth is noticeable, with even the threat of stagflation. Even if the economy is in crisis, it is still an extremely good time for corporate transactions in Poland. The Ecovis experts know why.

There are currently three main reasons for entrepreneurs wishing to sell their businesses.

1. The desire for consolidation

The consolidation of companies in times of serious economic turbulence is a natural event. It occurs in many industries – packaging, food, IT and TFL (Transport-Forwarding-Logistics). It involves buying smaller companies in the industry to increase a company’s own production capacity, possibly introducing new product lines and acquiring companies that provide complementary services or produce upstream components for the company’s own goods or services.

In addition, there are specific industries, such as renewable energy, where consolidation has a different, legal basis. The market is waiting for the loosening of regulations on the conditions for siting wind farms, and in the meantime the main players on the market are buying up projects at very different stages of development.

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It is currently an extremely promising time to buy a company in Poland on attractive terms.

Nikodem Multan, Attorney at law, Partner, ECOVIS LEGAL POLAND PRUŚ AND PARTNERS LAW FIRM, Warsaw, Poland

2. Fear of depreciation

Some business owners intend to sell their company out of the fear that it will lose value in connection with the war in Ukraine. Such intention is obviously unstable, as it is based on strong emotions. However, the rationality of this decision is not measured by economic indicators. Consequently, it is possible to find very interesting targets which may bring good profits if sold, as well as companies that will not attract much interest on the market. It is therefore important to recognise the reasons behind the decision to sell the company and to examine the potential particularly closely.

3. No prospective successor

The divestiture may also be due to the absence of successors to continue the family business. The transformation at the turn of the 1980s and 90s caused an entrepreneurial boom in Poland. Between 200,000 and 800,000 family businesses were established. Many owners, after more than 30 years of running their businesses, are now looking to relax and hand the company over into good hands. Where their children have chosen a different path, there is nothing left for them to do but look for a new owner.

What are the prospects for M&A activity in Poland?

Paradoxically, the closeness of the war and the complicated economic situation, not only in Poland but across the whole of Europe, seems to be having a positive effect on the prospects of acquiring interesting businesses in Poland.

For further information please contact:

Nikodem Multan, Attorney at law, Partner, ECOVIS LEGAL POLAND PRUŚ AND PARTNERS LAW FIRM, Warsaw, Poland
Email: nikodem.multan@ecovis.pl