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Several hundred million euros may fall into Poland as a result of “problem mergers and acquisitions” – experts

Funds specialized in the acquisition of assets in difficult situations (“distressed M&A”) are starting actively seek investment opportunities. It is estimated that they currently have €30-40 billion, of which several hundred million euros can go to Poland, experts from law firm Wolf Theiss assess. Bankruptcy and restructuring law, which does not facilitate such transactions, can be yet an obstacle.

“Many transactions have now been suspended or even canceled. An example is a high-profile LOT Polish Airlines agreement regarding the acquisition of German Condor. In the coming weeks, along with the severe reduction in lending that can be expected on the banking market, there will be major changes in the valuation of companies This, in turn, will launch entities specializing in asset acquisitions in a difficult situation,” Lech Giliciński from the Wolf Theiss Warsaw office, said.

According to the company, the COVID-19 epidemic will have a significant impact on the situation of companies and enterprises in Poland and Europe, as well as the merger and acquisition market. The first two months of 2020 were the weakest in terms of M&A transactions since 2005, although several significant ones were announced. Thyssenkrupp signed an agreement to sell the Elevator Technology segment to a consortium of investment funds Advent, Cinven and the RAG foundation for $18.7 billion. In addition, Thermo Fisher Scientific in early March agreed to acquire a molecular test supplier from Germany – Qiagen NV, for $11.5 billion.

In the first two months of this year. transactions worth $119.2 billion were announced worldwide, which means 49% a decrease compared to the same period last year.

“The market is currently very volatile because it is very difficult to value assets. I do not expect many transactions in the near future, but the situation will change in the coming months. Of course, it should be remembered that the capital financing distressed M&A transactions is one of the more expensive on the market, which results from its availability,” Giliciński commented.

According to him, in order to avoid falling victim to cheaters and even mafia interested in money laundering, it is worth focusing on professional service and proven business relationships.

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