POLAND Trends and Developments Contributed by: Agnieszka Janicka, Krzysztof Hajdamowicz, Tomasz Szekalski and Karol Kulhawik, Clifford Chance LLP
M&A market and deal conditions The trends that shaped the M&A market throughout 2025 have continued into the opening months of 2026 and are expected to persist for an extended period. Ongoing economic uncertainty continues to influ - ence deal-making, resulting in longer negotiations, more intricate transaction structures and increasingly rigorous due diligence processes. Sellers, cautious about whether the strong financial results of recent years can be sustained, are reassessing exit timing, while buyers are responding with heightened scrutiny to mitigate potential downside risks. As a result, valu - ation discussions occur more frequently and stretch across the entire deal cycle. At the same time, although overall deal volume has remained relatively stable, the market is shifting towards mid-market transactions. In contrast to pre - vious years, significantly fewer large-cap deals have been brought to signing and closing, reflecting a more selective appetite among major investors. Persistent valuation gaps between sellers and buy - ers, driven by elevated financing costs and uncertain macro-economic conditions, continue to add pres - sure to processes. This has increased deal complexity and contributed to a number of postponed or aban - doned transactions. Even so, many parties navigate these challenges successfully by relying on increas - ingly sophisticated structuring solutions. Earn-outs, deferred consideration, vendor loans, share swaps and other non-cash components have become impor - tant tools for aligning expectations. In parallel, war - ranty and indemnity (W&I) insurance has become an essential, and now standard, mechanism in Polish M&A deals, serving as a key instrument to balance risk allocation and facilitate agreement between the parties. Buyers are also placing stronger emphasis on perfor - mance-related safeguards within transactional docu - mentation. Longer gap periods between signing and closing, often extended by regulatory review timelines, have prompted buyers to demand more extensive information rights and protective interim covenants. Mechanisms such as material adverse change (MAC) clauses, walk-away rights and performance-monitor - ing undertakings offer buyers additional comfort and
flexibility in the event of a deteriorating business out - look. In 2026, private equity (PE) funds activity is expected to accelerate further, with secondary buyouts playing an increasingly prominent role as a growing pool of premium assets reaches maturity within sponsor port - folios. The high-quality companies that have already undergone significant value-creation strategies are likely to re-enter the market, making secondary trans - actions an effective channel for both deploying capital and providing liquidity. As sponsors prioritise portfolio optimisation and seek to recycle capital amid shift - ing market conditions, well-performing, de-risked assets are anticipated to trade hands more frequently between funds. This dynamic is set to reinforce deal flow and deepen competition for top-tier assets. The Polish M&A market continues to benefit from Poland’s overall economic stability, growth and resil - ience in the face of global economic challenges. With economic forecasts for 2026 being rather optimistic, despite certain uncertainties and difficulties, the mar - ket shows strong potential for continuous growth and development in the coming months. With no elections scheduled in Poland till the fourth quarter of 2027, no major impact of domestic political factors on the economy and the M&A market is anticipated in 2026. As expected, an ability to benefit from the EU recov - ery and resilience facility is already having a positive impact on various sectors in the economy, which is expected to continue in the coming years. Further - more, in 2026 Poland is expected to implement the EU SAFE (Security Action for Europe) instrument, which is expected to create business opportunities for com - panies involved in the defence sector. Looking ahead, anticipated macro-economic sta - bilisation in 2026, together with hopes for a lasting resolution of the war in Ukraine, is expected to unlock new assets and stimulate higher transaction activity. Poland remains an attractive market for investors prepared to engage in more innovative and nuanced deal structures, and those capable of managing risk effectively are likely to secure compelling opportuni - ties, despite continued uncertainty.
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