At our recent Dealmaker’s Dialogues event in Warsaw, a panel of distinguished experts shed light on the dynamic landscape of mergers and acquisitions (M&A) in Poland and the broader Central and Eastern European (CEE) region. The event provided a platform for Piotr Noceń, Joanna Ormińska, Paweł Bukowiński, Monika Dużyńska, and Bartłomiej Suchomski to share their insights.

Navigating Uncertainty
A prevailing theme of the discussion was the acknowledgment that uncertainty is an inherent part of the business landscape. However, the panelists unanimously agreed that there are no inherently "bad" times for M&A. In times of uncertainty, while the sell side might face challenges in pursuing its strategy, the buy side can often find strategic opportunities. This perspective is particularly relevant in the current global economic context.

Challenges and Opportunities
From the perspective of private equity (PE), the experts highlighted the complexities of fundraising in the existing environment. Exits with lower valuations and the increasing cost of capital pose challenges, but there is a silver lining. The prevailing sentiment was that this could be an opportune time for acquisitions. Poland is emerging as a key foreign investor in the CEE region, by virtue of the current war, often unfortunately the only one. Speaking on the advisory side, representatives from EY and White & Case LPP stressed that in times of uncertainty, the value of professional transaction advice becomes even greater.

Looking ahead, the panel delved into the anticipated challenges, promising opportunities, and emerging trends that are expected to shape the M&A environment in 2024. Notably, discussions revolved around the potential consequences of increasing interest rates and geopolitical tensions on deal dynamics. The panelists emphasized that TMT should be the strongest sector in the coming year.

In the context of Poland, challenges include the ongoing war in Ukraine, parliamentary elections, central bank monetary policy, and high inflation. These factors collectively create a challenging environment for foreign investors in the CEE region.

Paweł Bukowiński emphasized that businesses must navigate disruptions and uncertainties, which have accelerated in recent years. M&A, he argued, remains integral to the strategic agenda of growing businesses, offering a means to strengthen market positions, reallocate capital, and transform businesses.

Joanna Ormińska, on the topic of higher interest rates, provided a perspective that sees opportunities in adversity. She suggested that higher interest rates present a chance for companies to verify business models, optimize costs, and simplify processes. This, in turn, may lead to businesses reconsidering carveouts or selling entire entities, influencing the competitive landscape positively.

Optimism for Increased Activity
Despite the looming challenges and uncertainties, there was a unanimous belief that M&A will remain a critical strategy for companies seeking to adapt, grow, and thrive in the ever-evolving business environment of CEE and beyond.

A survey conducted at the event reflected attendees' sentiments that the state of the global economy will strongly influence M&A activity in Poland and the region in the coming year. The optimism about 2024 was palpable, with the consensus being that despite the challenges, the market is expected to witness increased activity.

A key focus of discussion was the impact of the upcoming parliamentary elections in Poland, with expectations that they will significantly influence the microeconomic situation in the quarters to come. The convergence of geopolitical events, economic policies, and business strategies will undoubtedly shape the M&A landscape in this vibrant and evolving region.

Are you interested in attending another Datasite event?
Our next CEE events are planned for January 2024 and Autumn 2024; please contact Ewa Zarnotal, Sales Director, for more information. To learn more about other upcoming and past Datasite events, please visit our website.