The total value of mergers and acquisitions completed by strategic investors in Poland in 2023 fell by nearly half to approximately $10 billion, according to the international consulting firm Bain & Company. The decline was attributed to the lack of mega-transactions similar to Orlen’s acquisition of PGNiG and Grupa Lotos in 2022 and the persistent high interest rates and uncertain geopolitical situation.
A lack of consensus regarding the development of the market has caused significant differences in valuations expected by buyers and sellers. In an annual survey conducted by Bain & Company among more than 300 board members of global firms, over two-thirds of buyers identified differences in valuation expectations as a hinderance to executing transactions, while about two-thirds of sellers stated they are holding back on transactions awaiting better valuations. Similar dynamics in Poland resulted in a total of 272 acquisitions involving strategic investors in 2023, representing a year-on-year decline of 23%. Bain & Company estimates do not take into account direct acquisitions of companies by private equity funds.
“Our analysis shows that the value of acquisitions involving industry investors in Poland was the lowest in five years. 2022 would have been weak, if not for Orlen’s acquisition of PGNiG and Lotos. For two years, the high cost of capital and geopolitical and macroeconomic turmoil have deterred transactions,” says Paweł Szreder, partner at Bain & Company. “This year we can expect a slight improvement, but not a significant leap. The market should see some optimism return with the slowing of inflation and expected interest rate reductions.”
In 2023, only three industries in Poland saw a combined increase in transaction values. The acquisition of stakes in gaming company Techland by Chinese conglomerate Tencent Holdings, and STS Holding by British group Entain, were the largest transactions in Poland last year and contributed to a fourfold increase in transaction volume in the technology sector. The health care and life sciences sector saw an increase of 79%, while the advanced manufacturing and services sector saw a 4% increase.
However, the increase in transaction values in these sectors did not offset declines in all other areas, especially the energy and natural resources sector which largely contributed to the weaker merger and acquisition market performance in the past year.
“The trends we observed in Poland last year are consistent with global and European trends,” adds Paweł Szreder. “The value and number of M&A transactions globally fell slightly compared to 2022, but the difference compared to the record 2021 was very significant. The dynamics in Poland would have been similar, if not for the mega-transactions completed by Orlen in 2022. History suggests that transaction market downturns rarely last longer than two years, so we enter 2024 with cautious optimism.”
According to the Bain & Company report, the global value of strategic M&A transactions fell by 6% in 2023 and their number by 12% compared to 2022. On the European market (EMEA), the total value of company purchases made by strategic investors fell by 18%, and their number by 14%.
The full report on the global mergers and acquisitions market is available at:
