Top five M&A topics for Central Europe in 2023

by Tomasz Kudelski

In this increasingly unstable, unpredictable and unfathomable world, trying to formulate any kind of prediction is fraught with risk. This is equally true of Central Europe which is currently having to deal with a host of known and unknown variables, and a problematic political and economic environment. In consultation with some of the biggest players on the European M&A market, we have put together some of key areas to watch in 2023:

1. ESG

The growing focus on environmental, social, and governance (ESG) issues is expected to drive M&A activity, as companies look to acquire or partner with businesses that are aligned with their ESG goals. Putin’s war in Ukraine and a shifting focus towards environmental issues could spell greater success for green energy projects on both a financial and social level.

2. AI and technology

The post-Covid-19 era continues, and increased focus on technology, artificial intelligence, and social media, as well as increasing integration of technology within traditional businesses should drive M&A activity in 2023.

3. Private healthcare

Severe limitations and strains on public healthcare systems across Europe (and especially in Central Europe) could spell the development and consolidation of a private medical sector on the Continent, which will open up superb investment opportunities in the healthcare industry that will be a force to be reckoned with on the M&A market.

4. End of globalisation

While turbulence on the world political stage has made the concept of globalisation less popular and less effective economically in many parts of the world (demonstrated by a shortage of various components and commodities), this trend will probably not affect cross-border M&A transactions within Europe, which have been consolidating against the risks caused by Russia’s invasion of Ukraine and increasing US-China friction.

5. Small is sexy

The belief in an everlasting economy of continuous growth and reducing costs is a thing of the past. This is opening up the market for smaller entrepreneurs and providers of services and goods who are searching for the opportunity to develop in niche markets. There could be tantalising treats for venture capital funds and private equity capital providers operating on a smaller scale.

Despite superficially problematic extenuating circumstances on the Continent, Central Europe (and especially Poland) appears to be doing better investment- wise than many would have envisaged.

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