The COVID-19 pandemic has had a negative impact on the global economy, including the M&A market. The consequences of the pandemic are visible at every stage of the currently conducted M&A transactions in Poland, which now tend to look very different from what we were used to. The worse profitability of Polish companies during the pandemic combined with strong competition on the market, and now the Russia's invasion of Ukraine have led to an increased focus on price on the sellers' side, all of which, as a strange result elevate the risk of mass takeovers of companies operating in Poland by foreign entities.

Polish Act on the Control of Certain Investments - reason for changes

The pandemic raised questions in Poland regarding the extent and the period during which these negative consequences could influence the standing of businesses, their ability to continue transactions and investments which were underway, and their ability to start new ventures. In order to protect Polish companies against hostile takeovers in the midst of the pandemic-driven crisis, the Polish legislator amended1 the existing Polish Act on the Control of Certain Investments dated July 24, 2015 ("CCI Act").

The CCI Act provides protection to entities of strategic importance for Poland in the certain IT-related sectors, as well as telecom, petrol and chemistry sectors ("Strategic Entities")2. Control with regard to Strategic Entities is exercised by the relevant ministers indicated in the CCI Act. However, the COVID-19 CCI Amendment Act, which entered into force in July 2020 introduced an additional investment control mechanism, independent of the concentration clearance procedure3 carried out by the President of the Polish Office of Competition and Consumer Protection ("Polish Competition Authority"). The control mechanism of the Polish Competition Authority refers to companies which are not Strategic Entities and run business activities in one of the sectors indicated in the CCI Act.

The detailed justification to amend CCI Act indicated the need to protect public order, public security and public health, as referred to in Article 52(1) and 65(1) of the Treaty on the Functioning of the European Union and taking into account Article 4(2) of the Treaty on European Union. Reference to categories protected by EU law is not incidental, since the COVID-19 CCI Amendment Act to some extent covers the area regulated by the EU Screening Regulation4, which has been directly applicable in Poland since October 2020 and constitutes a part of the framework of actions requested by the European Commission5.

The main issue raising questions in connection with the COVID-19 CCI Amendment Act is the interpretation by the Polish Competition Authority of one of the premises allowing the regulator to object to the transaction under the CCI Act, i.e., occurrence, as a result of the transaction, of a potential threat to public order, public security or public health in Poland. Doubts result from the highly speculative nature of these terms. Therefore, it might cause uncertainty among investors as to future decisions of the Polish Competition Authority under the amended CCI Act.

In addition to specifying the monitoring mechanisms, the EU Screening Regulation authorizes EU member states to introduce measures preventing a foreign investor from acquiring an enterprise or taking over control of an enterprise if such acquisition or control would pose a threat to the security or public order of a given state. In Poland, such additional measures were implemented in the COVID-19 CCI Amendment Act, which I discuss below.

Acquiring protected entities under the Polish Act on the Control of Certain Investments: financial criterion.

Certain Polish entities are subject to protection ("Protected Entities") when they are target of takeovers by entities, which have not had a registered office in any EU, EEA or OECD member states for at least two years preceding the notification filed with the Polish Competition Authority6, as well as their direct or indirect subsidiaries7. Pursuant to the CCI Act, the Protected Entities will be entrepreneurs seated in Poland, which:

  1. have the status of a Polish public company8; or
  2. have property that: (i) has been registered as facilities, installations, devices and services forming part of critical infrastructure or (ii) develop or modify software in the areas indicated by the CCI Act; or
  3. run business activity in one of the sectors indicated in the CCI Act - including, but not limited to production, storage and transport of electricity, petrol or diesel oil, production of fertilizers and chemical products, production and trade in explosives, weapons and ammunition as well as products and technology for military or police purposes, telecommunications activity, generation or transmission or distribution of heat or production of medical devices9.

According to the Polish legislator, such entities should be protected as they are important to maintain public order, security and health, especially with regard to the challenges related to counteracting the effects of the COVID-19 pandemic.

Moreover, in order to be classified as a Protected Entity, an entity must generate revenues from sales and services in Poland of at least EUR 10 million in any of the two financial years preceding the notification to be filed with the Polish Competition Authority10. The CCI Act does not specify how the revenues should be calculated by entities having subsidiaries. According to the CCI Act guideline published by the Polish Competition Authority11, the income of subsidiaries should also be included in the calculation in question. In addition, subsidiaries might be protected under the CCI Act independently.

Acquisition or reaching of significant interest or dominance in a Protected Entity

The Polish Competition Authority must be notified prior to the acquisition, reaching a significant interest, or the acquisition of dominance in a Protected Entity.

Significant interest is understood as a situation in which an investor is able to exert influence on another entity by:

  1. acquiring or taking up shares that will let them reach or exceed a threshold of 20% or 40% of votes, profit or capital of the Protected Entity; or
  2. acquiring or leasing an enterprise of the Protected Entity or its organized part.

Acquisition of dominance has been defined as a situation in which an investor is able to decide on the other entity's business directions by:

  1. acquiring shares, rights attached to shares or taking up shares; or
  2. concluding an agreement providing for the management of such an entity or transfer of profit by such an entity.

Therefore, the relationship of dominance under the CCI Act does not necessarily require that a threshold of 50% of the total number of votes be exceeded.

Procedural aspects - general remarks

The inspection procedure is initiated based on a notification filed by an entity intending to acquire or achieve significant interest or dominance and is divided into two phases:

  1. Phase 1 - the first phase that lasts up to 30 days intends to check whether any further control activities are required.
  2. Phase 2 - the second phase that takes up to 120 days is the proper control procedure. It concerns only such cases that may potentially pose a threat to public order, public security or public health. In particular, if there is a (even potential) risk of moving production abroad, closing a plant or otherwise threatening the activity of the Protected Entity. In this assessment, the activities of the Protected Entity are of great importance. In general, the smaller the company (the business it conducts), the lower the risk of a threat to public order, public security or public health will be.

The control procedure under the CCI Act is based on the solutions adopted in the European Merger Regulation No. 139/200412.

At the end of the inspection proceedings, the President of the Polish Competition Authority issues:

  1. a decision refusing to commence the Phase 1 of the control procedure, which means that the Polish Competition Authority does not object to the acquisition or achievement of a significant interest or the acquisition of dominance13; or
  2. a decision expressing objection to the acquisition or achievement of a significant interest or acquisition of dominance over the Protected Entity14; or
  3. a decision cancelling further proceedings.

The President of the Polish Competition Authority will oppose the acquisition if:

  1. there is at least a potential threat to public order, security or health in Poland; or
  2. the planned transaction might have a negative impact on the projects and programs of the European Union interest; or
  3. with respect to legal persons - the Polish Competition Authority is not able to determine whether the buyer has not had its seat registered in any EU, EEA or OECD member states for at least two years from the date notification was filed; or
  4. the notifying entity does not correct the formal mistakes in the notification.

Non-compliance with the notification obligation may result in two main types of sanctions related to violations of the CCI Act, which are:

  1. civil law sanctions - the main one being the invalidity of the transaction; and
  2. criminal law sanctions, which might include penalty up to PLN 50 million and possible imprisonment of a person authorized to represent the entity, which did not file the notification.

Regulatory impact assessment of the COVID-19 CCI Amendment Act on the cross-border acquisitions in Poland

According to the publicly available data concerning the Polish Competition Authority activities in 202115, the regulator initiated eight investment control proceedings under the CCI Act and issued three decisions in total - two granting consent for the transactions16 and one on discontinuation of the proceedings. There has been no information on objections to the transactions notified yet. Once such decisions are issued, they will show the direction of jurisprudence in this area.

Please note that the premises allowing to perform the control procedure included in the CCI Act (such as posing threat to public order, security or health) remain outside of the scope of the main competencies of the Polish Competition Authority. It is the Polish government agencies (such as the Ministry of Internal Affairs and Administration, Ministry of Defence or Ministry of Health) that are responsible for them. This raises a reasonable question whether the Polish Competition Authority has sufficient expertise to efficiently conduct control in this respect. In my opinion, the procedure should be carried out by public administration bodies mentioned above instead of the Polish Competition Authority, which should only focus on the typical anti-monopoly concentration clearance.

Although as at the date of this article the activities report of the Polish Competition Authority for 2022 has not been published yet, it can be argued that the main concerns of the Polish government relating to mass acquisitions of Polish companies weakened by the COVID-19 pandemic by non-EU/EEA/OECD entities were greatly exaggerated. It cannot be excluded that the new regulations have scared many potential investors away, which would explain the low number of transactions reported to the Polish Competition Authority.

The new regulations introduced by the COVID-19 CCI Amendment Act may significantly slow down the acquisitions in Poland, generate additional risks, costs and hinder access to capital. For instance, the purchaser might not know if the acquired entity modifies the software for operating devices or systems used in transport17 and does not report the envisaged transaction. In such case, such transaction would be declared invalid. With this in mind, a detailed due diligence examination of the actual scope of operations of the acquired entity is of particular importance. Generally speaking, from an investor's perspective, the COVID-19 CCI Amendment Act added another hurdle in the M&A process in Poland since the clearance from the Polish Competition Authority needs to be obtained on top of other sectoral type permits.

Due to the fact that the government's concerns about the increase in the number of hostile takeovers in Poland did not materialize, it seems arguable that the legislator should amend the CCI Act and:

  1. reduce the number of documents necessary to be submitted in the course of administrative proceedings, which now include - among others - description of full corporate structure of the investor's capital group, approved financial statements of the notifying entity, together with the opinions and reports of the statutory auditor (if the financial statements were audited) for the last 3 years, investment plans in relation to the Protected Entity, as well as medium-term financial goals and directions of business development of the Protected Entity in the post-closing period;
  2. delegate the control power of the Polish Competition Authority in this respect to relevant government agencies.

Notwithstanding the foregoing, as part of preparations for acquisitions in Poland, each investor should conduct an analysis of whether the target company could be considered a Protected Entity and - if so - review its ownership structure. In terms of a transaction schedule, investors should take into account the time for any additional evaluation and the possible proceedings before the Polish Competition Authority.


1. Amendment introduced by the Act of 19 June 2020 on subsidies to the interest rate of bank loans granted to entrepreneurs affected by the effects of COVID-19 and on simplified procedure for approval of the arrangement in connection with the occurrence of COVID-19 (consolidated text: Journal of Laws of 2022, item 2141) ("COVID-19 CCI Amendment Act").

2. List of Strategic Entities has been indicated in the Regulation of 16 December 2022 of the Council of Ministers on the list of entities subject to protection and the competent control authorities (Journal of Laws of 2022, item 2838). As at the date of this article, the list includes 15 Strategic Entities.

3. As described in the Competition and Consumer Protection Act of February 16, 2007 (consolidated text: Journal of Laws of 2021, item 275).

4. Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union.

5. Guidance to the Member States concerning foreign direct investment and free movement of capital from third countries, and the protection of Europe's strategic assets, ahead of the application of Regulation (EU) 2019/452 (FDI Screening Regulation), available online in English at:

6. Article 12a(1) in connection with Article 12c(1)(5) of the CCI Act.

7. Article 12c(6)(1) of the CCI Act.

8. Under the Polish Act of 29 July 2005 on Public Offering and the Conditions for Introducing Financial Instruments to the Organized Trading System and Public Companies.

9. Detailed list of business activities has been indicated in the Article 12d of the CCI Act.

10. Article 12d(4) of the CCI Act.

11. Polish-language CCI Act guideline published by the Polish Competition Authority is available for download at:

12. Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between undertakings.

13. Article 12h(5)(1) of the CCI Act.

14. Article 12j(1) of the CCI Act.

15. Available online in English at:

16. (1) Decision no. DKK-179/2020 dated 8 October 2020 - consent for H&F Corporate Investors VIII Ltd. to acquire dominance over Centrum Rozliczen Elektronicznych Polskie ePlatnosci S.A.; (2) Decision no. DKK-42/2021 dated 10 February 2021 - consent for Changjiu Logistics GmbH to acquire significant interest in Adampol S.A.

17. As described in the Article 12d(2)(2) of the CCI Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.