The purchase of Britain’s Thomas Cook travel operator by Polish online platform eSky is part of a wider trend of former Eastern Bloc companies expanding westward, raising eyebrows in the UK.
A household name in Britain and one of the world’s biggest and oldest travel firms, Thomas Cook returned to European ownership last week when its Chinese owner, Forsum, sold for £30 million (€35.5 million).
The deal was no isolated incident, it appears, as firms from Poland and other Central European countries, buoyed by strong economic growth and looking to expand, home in on British firms.
Earlier this month Polish company Emtech, a specialist manufacturer of semi-trailers and low-loaders, bought British producer Andover Trailers, while Poundland, a discount store found on many British highstreets, is now owned by Warsaw-listed Pepco.
With Poland’s burgeoning economy and expanding tech startup scene, the trend is set to continue, an article in the British newspaper The Telegraph argued, saying: “Polish companies are starting to do deals for old-established companies, and taking a stake in the rest of the world.”
Piotr Kubalka, CEO of J Dauman, the consultancy firm that advised on Emtech's takeover of Andover, says the market has changed in recent years.
“A couple of years ago most of them [Polish clients] were interested in opening limited companies, subsidiaries and exploring the market, but now we have a lot of questions about taking over British competitors,” Kubalka told TVP World. “We didn’t see it four or five years ago but now it’s very popular.”
He explained that companies founded after the fall of communism are now so large they can afford to buy their rivals. Moreover, the only way to maintain their growth rates is to expand abroad. But they realize that entering the market and expanding their business on their own will be time-consuming and costly.
The deal was no isolated incident, it appears, as firms from Poland and other Central European countries, buoyed by strong economic growth and looking to expand, home in on British firms.
Earlier this month Polish company Emtech, a specialist manufacturer of semi-trailers and low-loaders, bought British producer Andover Trailers, while Poundland, a discount store found on many British highstreets, is now owned by Warsaw-listed Pepco.
With Poland’s burgeoning economy and expanding tech startup scene, the trend is set to continue, an article in the British newspaper The Telegraph argued, saying: “Polish companies are starting to do deals for old-established companies, and taking a stake in the rest of the world.”
Piotr Kubalka, CEO of J Dauman, the consultancy firm that advised on Emtech's takeover of Andover, says the market has changed in recent years.
“A couple of years ago most of them [Polish clients] were interested in opening limited companies, subsidiaries and exploring the market, but now we have a lot of questions about taking over British competitors,” Kubalka told TVP World. “We didn’t see it four or five years ago but now it’s very popular.”
He explained that companies founded after the fall of communism are now so large they can afford to buy their rivals. Moreover, the only way to maintain their growth rates is to expand abroad. But they realize that entering the market and expanding their business on their own will be time-consuming and costly.
“If you want to get turnover in the region of 10, 20, 50 million pounds in the first year, mergers and acquisitions are the only way to do so,” Kubalka said.
Go West
Farther afield too, Central European companies are eyeing deals in Western Europe and globally. For example, Czech entrepreneur Daniel Křetínský is in the process of taking over the Royal Mail. The deal is a “reminder that takeovers are just as likely to be launched from what 30 years ago was still the Soviet Bloc as they are from any of the traditional giants of the European economy,” The Telegraph wrote.
As drivers for Poland’s emergence, observers point to its relatively low corporate tax rate of 19%, its access to EU markets without the burden of euro adoption and the restrictive monetary policy it entails, and above all, its rapidly expanding economy—growth is forecast for 3% this year, among the highest in the EU.
“It may not be widely appreciated yet, but Poland is an increasingly rich country,” The Telegraph wrote. “It has grown steadily for the last 25 years, and it is now eight times larger than it was when communism collapsed.”
Poland is now the EU’s sixth largest economy and fifth in terms of purchasing power and is widely expected to overtake Spain and even Italy in the coming years, according to The Telegraph.
Against this backdrop, the Warsaw Stock Exchange has risen by 24% over the last year, providing Polish players with the funds for takeovers and an appetite for global expansion.
Poland is also, apparently, home to six ‘unicorns’—start-ups valued at more than $1 billion—including e-commerce platform Allegro and automated delivery firm InPost.
Recent years have seen India and China emerge as global market movers, and the coming decade may well mark the rise of the former Eastern Bloc.
Go West
Farther afield too, Central European companies are eyeing deals in Western Europe and globally. For example, Czech entrepreneur Daniel Křetínský is in the process of taking over the Royal Mail. The deal is a “reminder that takeovers are just as likely to be launched from what 30 years ago was still the Soviet Bloc as they are from any of the traditional giants of the European economy,” The Telegraph wrote.
As drivers for Poland’s emergence, observers point to its relatively low corporate tax rate of 19%, its access to EU markets without the burden of euro adoption and the restrictive monetary policy it entails, and above all, its rapidly expanding economy—growth is forecast for 3% this year, among the highest in the EU.
“It may not be widely appreciated yet, but Poland is an increasingly rich country,” The Telegraph wrote. “It has grown steadily for the last 25 years, and it is now eight times larger than it was when communism collapsed.”
Poland is now the EU’s sixth largest economy and fifth in terms of purchasing power and is widely expected to overtake Spain and even Italy in the coming years, according to The Telegraph.
Against this backdrop, the Warsaw Stock Exchange has risen by 24% over the last year, providing Polish players with the funds for takeovers and an appetite for global expansion.
Poland is also, apparently, home to six ‘unicorns’—start-ups valued at more than $1 billion—including e-commerce platform Allegro and automated delivery firm InPost.
Recent years have seen India and China emerge as global market movers, and the coming decade may well mark the rise of the former Eastern Bloc.
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