Sharper decline in domestic than in outbound transactions in 2020
According to the data published in Mergermarket, since the beginning of 2020, Polish companies have completed 164 M&A transactions, 44 of which were acquisitions of companies abroad (27%). After a slight market downturn in 2020, there is now a clear rebound, especially in terms of foreign purchases. After the number of foreign acquisitions fell from 22 in 2019 to 20 in 2020, it had risen to 24 at the end of the third quarter of 2021.
Also in the area of domestic acquisitions, the number of transactions decreased from 82 in 2019 to 63 in 2020.
The decline in the number of transactions in 2020 is certainly the result of the pandemic and the restrictions that followed. Business, however, quickly learned to operate in the new circumstances, and M&A processes picked up again in 2021. You can also see the growing appetite of Polish entrepreneurs for foreign acquisitions - both in numbers and in our talks with Polish investors – comments Przemysław Furmaga, Partner and Head of the M&A practice at CRIDO Legal.
Polish companies prefer to invest in smaller enterprises
The trend in domestic M&A is similar - since the beginning of 2020, 32 out of 39 transactions (with a known value) have been below EUR 100 million (i.e. 82%). In 2015-2019, there were respectively 165 out of 199 (i.e. 83%).
Most of the foreign acquisitions made by Polish companies took place in Europe. This is driven by cultural, economic and legal similarities, as well as the existing business contacts with European enterprises, comments Przemysław Furmaga. According to the CRIDO Legal report, in the period 2020-IIIQ2021, Polish companies made most acquisitions in Germany (7 transactions). In second place - 4 acquisitions took place in each of Lithuania and Hungary. Outside Europe, individual acquisitions took place, inter alia, in geographically distant countries such as the USA, Australia, Canada and the United Arab Emirates.
Polish investors most often took over production companies abroad. Interestingly, during the pandemic, there is a clear increase in foreign acquisitions in the biotechnology and e-commerce sectors. On the other hand, interest in companies from the consumer goods industry decreased.
The report was based on data from the Mergermarket database.
The full version of the report can be downloaded at crido.pl.