Stock market return and merger and acquisition activity in Poland

Eliasz Czajkowski; Mateusz Mikutowski

doi:10.18559/ref.2024.1.1092

Authors

Eliasz Czajkowski Poznań University of Economics and Business, Poznań, Poland
Mateusz Mikutowski Poznań University of Economics and Business, Poznań, Poland https://orcid.org/0000-0002-5248-265X

DOI:

https://doi.org/10.18559/ref.2024.1.1092

Keywords:

rates of return, stock market, economic conditions, mergers and acquisitions, correlation

Abstract

This article explores mergers and acquisitions trends in the Polish market in a period between 2019 and 2022, focusing on transactions exceeding one million dollars and their correlation with sector-specific stock market returns. The research reveals that the real estate sector, encompassing both development and property management, dominated M&A activity, comprising 25% of transactions in 2022. Significant positive correlations were observed between transaction volumes and average stock market returns, notably in sectors like real estate (R-Pearson = 0.75) and TMT (R-Pearson = 0.87). These findings indicate that sectors with higher returns attracted more M&A activity, reflecting investor confidence and strategic growth opportunities. Despite fluctuations in company valuations post-pandemic, the overall volume of M&A transactions continued to rise, driven by firms with strong cash reserves leveraging lower valuations for strategic expansions. The study anticipates sustained momentum in technology and real estate sectors, alongside emerging opportunities in energy and biotechnology, influenced by global trends and technological advancements. This research contributes valuable insights into the evolving landscape of M&A in Poland, highlighting sectoral attractiveness and strategic implications for investors and businesses.

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