M&A and privatisations in Poland : key success factors of cross-border acquisitions into the Polish market
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LIST OF FIGURES XVII
LIST OF TABLES XIX
TERMS OF REFERENCE XXI
1. INTRODUCTION 1
1.1. THE POLISH CHALLENGE: ACQUISITIONS INTO POLAND'S PRIVATISING INDUSTRIES 1
1.2. DEFINITION OF TERMS 3
1.2.1. Central and Eastern Europe (CEE) 3
1.2.2. Mergers and Acquisitions 4
1.2.3. Privatisation 4
1.2.4. Key success factors 4
1.3. STRUCTURE OF THE DISSERTATION 5
2. METHODOLOGY 9
2.1. RESEARCH BACKGROUND AND RATTONALE FOR THE SELECTED TOPIC 9
2.2. RESEARCHOBJECTlVES 10
2.3. DATA GATHERING METHOD 10
2.3.1. Secondary research 10
2.3.1.1. General approach 10
2.3.1.2. Limitations 1 1
2.3.2. Primary Research 12
2.3.2.1. Data gathenng instrument l2
2.3.2.2. Sampling plan 14
2.3.2.2.1. Target population 14
2.3.2.2.2. Sampling method 14
2.3.2.3. Data collection 15
2.3.2.4. Limitations 16
3. FRAMEWORK CONDITIONS FOR ACQUISITIONS IN POLAND 17
3.1. POLITICAL AND ECONOMIC BACKGROUND OF POLAND 17
3.1.1. Poland's political environment 17
3.1.2. Poland's economic environment within Central and Eastern Europe 21
3.1 2.1. Economic situation at the end of the 1980s 21
3.1.2.2. Economic development dunng the 1990s, current economic situation
and outlook 25
3.1.2.3. Foreign direct investments (FDI) 31
3.2. LEGAL PRIVATISATION ENVIRONMENT IN POLAND 35
3.2.1. Small privatisation 38
3.2.2. Mass privatisation programme 38
3.2.3. Capital (indirect) privatisation 39
3.2.3.1. Trade sale (public tender) and pnvatisation advisor 39
3.2.3.2. Public offering (IPO) 41
3.2.4. Direct privatisation 42
3.2.5. Liquidation (bankruptcy) 43
3.2.6. Reprivatisation / Restitution 43
3.2.7. Privatisation progress and expected revenues 44
4. ACQUISITION STRATEGIES IN POLAND 45
4.1. MARKET ENTRY STRATEGIES 45
4.2. STRATEGIC ACQUISITION PROCESS 48
4.3. VALUE CREATION POTENTIAES—SOURCES OF ACQUISITION SUCCESS 49
4.4. PRE-ACQUISITIONPHASE 50
4.4.1. Strategic objective: the right reason 50
4.4.1.1. Strategic positioning and globalisation 50
4.4.1.2. Market entry objectives 52
4.4.1.3. Obstacles to market entry 54
4.4.1.4. Conclusion: key success factors 55
4.4.2. Search and screening process: the right information 56
4.4.2.1. Project organisation 56
4.4.2.2. Information sources and the role of advisors 56
4.4.2.3. Development of a target requirement profile 57
4.4.2.4. Analysis of competitive environment 59
4.4.2.5. Analysis of the potential Polish target 61
4.4.2.5.1. Typical weaknesses of Polish companies 61
4.4.2.5.2. Typical strengths of Polish companies 62
4.4.2.5.3. Preliminary integration plan 63
4.4.2.6. Conclusion: key success factors 63
4.4.3. Valuation: the "right" price 64
4.4.3.1. Value of assets (Book Value/ Adjusted Book Value) 68
4.4.3.2. Discounted Cash Flow valuation (DCF) 69
4.4.3.3. Multiples and comparable transactions 72
4.4.3.4. Conclusion: key success factors 73
4.5. THE DEAL - THE RIGHT EXECUTION 74
4.5.1. Expectations of parties involved 75
4.5.2. Tender procedure 77
4.5.2.1. Inforrnation Memorandum 77
4.5.2.2. Key elements of a bidding proposal 77
4.5.2.2.1. Evaluation criteria 77
4.5.2.2.2 Price-method package 78
4.5.3. Due diligence 83
4.5.4. Negotiations 84
4.5.5. Documentation, signing and closing 85
4.5.6. Conclusion: key successfactors 85
4.6. POST ACQUISITION INTEGRATION - THE RIGHT IMPLEMENTATION 86
4.6.1. Integration approaches 86
4.6.2. Speed of integration 88
4.6.3. Strategic and operative integration: turnaround-management 89
4.6.3.1. Managing strategy 89
4.6.3.2. Managing operational factors 90
4.6.3.3. Managing cultural differences 91
4.6.4. Conclusion: key successfactors 95
5. PRIMARYRESEARCHRESULTS:KEYSUCCESSFACTORS 97
5.1. GENERAL RESULTS 97
5.1.1. Findings and interpretations 97
5.1.2. Conclusions 101
5.2. STRATEGIC OBJECTIVE: THE RIGHT REASON 103
5.2.1. Findings and interpretations 103
5.2.2. Conclusions 105
5.3. SEARCH AND SCREENING PROCESS: THE RIGHT INFORMATION 105
5.3.1. Findings and interpretations 105
5.3.2. Conclusions 110
5.4. VALUATION: THE "RIGHT" PRICE 111
5.4.1. Findings and interpretations 111
5.4.2. Conclusions 114
5.5. THE DEAL—THE RIGHT EXECUTION 115
5.5.1. Findings and interpretations 115
5.5.2. Conclusions 119
5.6. POST-ACQUISITION INTEGRATION: THE RIGHT IMPLEMENTATION 121
5.6.1. Findings and interpretations 121
5.6.2. Conclusions 124
5.7. USE OF ADVISORS 126
5.7.1. Findings and interpretations 126
5.7.2. Conclusions 127
6. CONCLUSIONS AND RECOMMENDATIONS 129
7. PROSPECTS 135
BIBLIOGRAPHY 229