Opinion

Last updated: 9th Jan 2012

Contrary to other European markets, the Polish M&A market experienced one of its most active years. According to Mergermarket data, the total value of 120+ transactions that closed by 18th December totalled US$21.3bn, a whopping 77% more than in 2010. This includes the US$6.6bn buyout of Polkomtel, one of the country’s leading mobile phone operators by local tycoon Zygmunt Solorz.

The 2011 Polish deals were primarily focused on TMT (the aforementioned Polkomtel, the disposal of TP Emitel – owner and operator of communication network infrastructure, a transparent acquisition of TV Polsat by the WSE-listed Polsat Cyfrowy, a JV between Polish ITI and Canal+ in the digital TV market to name a few); banking (the acquisition of BZWBK by Santander) and energy (the exit of Vattenfall with assets acquired by Polish State-controlled energy conglomerates). Not to mention pure privatisation deals executed via the stock exchange (JSW – Europe’s leading coking coal player) and trade sales.
One of the most interesting features of 2011 was that more and more Polish players were becoming involved in the larger transactions.

Moreover, investors are emerging from previously untapped sources: Japanese investors recently announced their interest in the country’s assets (in December 2011 an acquisition of a listed specialist insurer TU Europa by a consortium of German Talanx and Japanese Meiji Yasuda was announced).

Looking ahead we expect deals in TMT, further consolidation of FMCG retail and deals food and drink.
Investors should also look at investing in smaller engineering and contracting companies that specialise in the energy sector as well as existing P2P opportunities, given the current attractive price levels on the Warsaw Stock Exchange. It bears noting that the legislative background for such deals is more favorable than in the EU as an investor is obliged to bid for 100% of shares only if controlling a +66% stake and not crossing the 33% threshold.

We expect the state treasury to continue the privatisation efforts it started in 2011 (most notably in chemicals, energy generation and distribution and in the financial sector).

Obviously, the total number and value of deals in 2012 depend on Poland’s economic performance and resilience to the economic uncertainty surrounding the EU. Nevertheless, we have good reason to believe the M&A market in Poland is promising and for opportunities to be plentiful.

Piotr Olejniczak
Director
IPOPEMA