Poland leads CEE wave of UK legacy firm buyouts

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Polish online platform eSky’s GBP 30mn (EUR 35.5mn) purchase of Thomas Cook from China’s Fosun Tourism Group signals a broader westward expansion trend of companies from Central and Eastern Europe (CEE), and media outlets in the UK and Poland are taking note.

Emtech, Pepco among Polish firms buying UK companies

“Poland is becoming an increasingly wealthy country”, with an economy that “has grown steadily for 25 years and is now 8 times larger than it was when communism collapsed”, UK daily The Telegraph wrote. As the influence of CEE’s biggest economy grows, the next decade may well see the rise of CEE as a global market force, Polish news network TVPWorld predicted.

The CEE firms scooping up UK assets are often far younger than the company being acquired: founded in 1841, Thomas Cook is generally acknowledged as the inventor of both the package tour and modern tourism as a whole. The Telegraph added that: “Polish companies are starting to do deals for old-established companies, taking a stake in the rest of the world.”

Emtech promises best practices from ‘both sides of the English Channel’

An early sign of the trend was discount retailer Warsaw-listed Pepco acquiring a UK company with a similar profile Poundland in 2017. Fast forward to September 2024, and Polish manufacturer Emtech bought UK low-bed trailer manufacturer Andover Trailers, whose predecessor company was established in 1809.

Piotr Kubalka, CEO of consultancy J Dauman, which advised on Emtech’s acquisition of Andover Trailers, said Polish companies founded after the fall of communism are now large enough to acquire foreign rivals and are eyeing UK competitors, the British-Polish Chamber of Commerce reported.

“Previously, they were interested in opening subsidiaries, but now we’re seeing more interest in takeovers,” Kubalka said, adding that “if you want to achieve 10 million, 20 million or 50 million pounds in turnover in the first year, mergers and acquisitions are the only way to do it.”

“Just as Emtech took over a renowned British brand with long traditions and a portfolio of clients, more and more investment opportunities are emerging in other industries. Among Polish companies, the number of such acquisitions made in Great Britain in the first 9 months of 2024 is already twice as high as it was in the whole of 2023,” Kubalka noted.

Emtech and Andover Trailers CEO Adam Duda said: “We want to build our future on international markets, hence the decision to buy the British company. It’s a company with an excellent international reputation. Knowledge of the British market and the trust we have built since 2008 with the owners of Andover Trailers have allowed us to thoroughly understand the specifics of their business and the needs of our customers.

“Thanks to this, we will be able to significantly expand our product range and increase our share in the UK market. This is an important step in the development of our company,” Duda said, adding that “we have acquired 95% of the shares of the British company, which gives us full control over all of Andover Trailers’ assets, such as the trademark, intellectual property, and know-how. The transaction will enable us to integrate the best practices developed on both sides of the English Channel.”

Acquisitions fuelled by economic growth

Behind the shifting European landscape is a 24% Warsaw Stock Exchange rise in the last year, providing Polish companies with capital for global expansion. Other factors driving Poland’s rise include a relatively low corporate tax rate of 19%, access to EU markets, and relatively strong economic growth, forecast at 3% this year.

Moreover Poland is now the EU’s sixth-largest economy – and fifth in purchasing power – with expectations to surpass Spain and Italy soon. Poland is also home to six startups valued at more than USD 1bn, or “unicorns”: e-commerce platform Allegro, courier InPost, video game makers CD Projekt and Techland, recruitment website manager Pracuj Group, and text to voice technology firm Eleven Labs.

Meanwhile Czech entrepreneur Daniel Kretinsky is purchasing the UK’s postal service the Royal Mail, established in 1516, which The Telegraph calls a sign that “takeovers are now just as likely to come from the former Soviet Bloc as from traditional European powers”.