Deal basics and types

M&A and corporate finance glossary: 29 entries in English and Polish

M&A and corporate finance glossary: deal basics and types

The entries in this section explain what mergers and acquisitions are and the forms a deal can take: a stock or asset purchase, a merger or division of companies, a joint venture, an acquisition of control, or a partial sale of shares. They also cover synergies, post-merger integration, and the concepts parties use in negotiations, such as the walk-away price and the best alternative to a negotiated agreement.

Prepared by the Capital One Advisers team. Entries last reviewed: November 12, 2026.

Entries from A to Z (29):

Acquisition

Polish: przejęcie / akwizycja

An acquisition is an investor’s taking control of another party’s company or business, most often by buying its shares or acquiring the business or an organized part of it. A company acquired through a share purchase continues as a separate legal entity and, where the buyer is a company, usually becomes its subsidiary. In a Polish statutory merger by acquisition, by contrast, the target is dissolved without liquidation (Article 493 § 1 KSH). The Code uses the word “przejęcie” more narrowly: a merger by acquisition is one of the two ways companies can merge (Article 492 § 1(1) KSH).

Not to be confused with: merger.

Acquisition of control

Polish: przejęcie kontroli

Acquisition of control means gaining the ability to exercise decisive influence over a company, usually through a majority of votes at the shareholders’ meeting or the right to appoint most members of the management board. The Polish Commercial Companies Code treats a commercial company as a parent company, among other cases, when it directly or indirectly holds a majority of votes at the shareholders’ meeting or general meeting of another capital company or can appoint or remove most members of its management board, including under agreements with other persons (Article 4 § 1(4)(a) and (b) KSH). Control, including joint control, can also come from veto rights over strategic matters such as the budget, the business plan, or major investments, even with a minority stake. An acquisition of control may require clearance from the President of UOKiK (Article 13(2)(2) of the Competition and Consumer Protection Act), and a shareholder, or a party that has acquired shares indirectly, that exceeds 50% of the total votes in a public company must generally announce a tender offer for all the remaining shares within three months (Article 73(1) of the Public Offering Act), subject to exceptions including those in Article 73(2), (3), (3a), and (5) and Article 75. The price of a controlling stake usually includes a control premium.

Asset purchase, asset deal

Polish: sprzedaż przedsiębiorstwa lub aktywów

An asset purchase (asset deal) is a transaction in which the buyer acquires a business, an organized part of a business, or selected assets from the seller, rather than shares in a company. A transfer of a business requires written form with notarized signatures, subject to the form rules for legal transactions concerning real estate (Article 75¹ §§ 1 and 4 of the Polish Civil Code), and a sale by a limited liability, simple joint-stock, or joint-stock company also requires a shareholders’ or general meeting resolution (Articles 228(3), 300⁸¹(2), and 393(3) KSH). A transfer of a business owned by a person or entity entered in a public register must also be entered in that register (Article 75¹ § 2 of the Civil Code). There is no universal succession: the buyer’s assumption of the seller’s debts requires the creditors’ consent (Article 519 § 2(2) of the Civil Code), so transferring contracts usually requires the counterparties’ consent. The buyer of a business is jointly and severally liable with the seller for obligations related to running it, up to the value of the business acquired, based on its condition at the time of acquisition and prices at the time the creditor is paid, unless it was unaware of them despite exercising due care, and this liability cannot be excluded or limited without the creditor’s consent (Article 55⁴ of the Civil Code). The buyer of a business or an organized part of it is also jointly and severally liable, with all its assets, for the seller’s business-related tax arrears arising up to the date of acquisition, up to the value of the business or part acquired, unless it could not have known of them despite due care (Article 112 §§ 1 and 3 of the Tax Ordinance). It is not liable for arrears not shown in a certificate of the seller’s tax arrears, but if more than 30 days pass between the certificate and the transfer, it is also liable for tax arrears and the other amounts listed in Article 107 § 2(2)–(4) of the Tax Ordinance arising in that time (Article 112 §§ 6 and 7). Article 112 does not apply to acquisitions in enforcement or bankruptcy proceedings (Article 112a of the Tax Ordinance). If the deal amounts to a transfer of a workplace or part of it to the buyer, the buyer becomes a party to the existing employment relationships by operation of law (Article 23¹ § 1 of the Labor Code), and where part of a workplace is transferred, it is jointly and severally liable with the seller for employment obligations that arose before the transfer (Article 23¹ § 2). A transfer of a business or an organized part of it falls outside the scope of VAT (Article 6(1) of the VAT Act), and its sale is subject to civil law transactions tax (PCC), while a company’s sale of individual assets is generally subject to VAT (Article 5(1)(1) of the VAT Act).

Best alternative to a negotiated agreement, BATNA

Polish: najlepsza alternatywa dla negocjowanego porozumienia

The best alternative to a negotiated agreement (BATNA) is the best option a party has if negotiations fail, such as an offer from another buyer, continuing to run the business independently, or a different acquisition target. The better the BATNA, the stronger the negotiating position, which is why sellers often run a process with several buyers. Together with the party’s own valuation, the BATNA helps set the walk-away price: a party should not accept terms worse than its best alternative.

Buy-and-build

Polish: strategia buy-and-build

Buy-and-build is a strategy of building a larger business by acquiring a platform company and then adding further, usually smaller, companies from the same or a related industry (add-on acquisitions). It is used mainly by private equity funds in fragmented industries. Value comes from synergies, professionalized management, and the fact that a larger group is sometimes valued at a higher multiple on exit than the small companies bought along the way. The strategy requires efficient integration and financing for successive acquisitions.

Buy-and-hold

Polish: strategia buy-and-hold

Buy-and-hold is a strategy of buying a company or shares with the intention of holding the investment for the long term, without a fixed exit date. The investor may earn returns from dividends, from growth in the company’s value over time, or from both. It is used, among others, by strategic investors, family offices, and funds with a long investment horizon. A typical private equity fund, by contrast, usually sells a company after several years. For an owner who sells part of the company, such an investor means a lower risk of a forced sale of the whole business later.

Carve-out

Polish: wydzielenie biznesu

A carve-out is the separation of part of a company’s or group’s operations, such as a product line, a plant, or a subsidiary, so that it can be sold or listed on a stock exchange. It requires allocating assets, contracts, employees, and financial data to the separated business, often also preparing separate financial statements for it and a transition services agreement if the new owner will use the group’s services for a while. Legally, a carve-out can take the form of a sale of an organized part of the business, a contribution of it in kind to a new company, or a demerger by spin-off or by separation (Article 529 § 1(4) and (5) of the Commercial Companies Code, KSH).

Not to be confused with: spin-off.

Cash-in and cash-out

Polish: cash-in i cash-out

Cash-in and cash-out are two ways an investor can enter a company, and they differ in who receives the money. In a cash-in, the investor subscribes for newly issued shares, and the money goes to the company to fund its growth. In a cash-out, the investor buys existing shares from the current shareholders, and the money goes to them. Deals often combine both. In a cash-in, the existing shareholders’ percentage stakes shrink through dilution. In a cash-out, only the selling shareholders’ stakes shrink. In US terms, a cash-in is a primary investment and a cash-out a secondary purchase.

Cost synergies

Polish: synergie kosztowe

Cost synergies are the savings that become possible after two businesses combine, for example through joint purchasing on better terms, closing duplicate offices, warehouses, or plants, merging support functions, or moving to a single IT system. They are easier to quantify and achieve than revenue synergies, because they depend mainly on the new owner’s decisions. Achieving them usually requires one-time integration costs, such as severance, relocating production, or replacing systems, which must be deducted from the value of the savings.

Not to be confused with: revenue synergies.

Deal

Polish: transakcja

A deal, in M&A jargon, is a proposed or completed purchase, sale, merger, or equity investment, as well as the whole process from the first conversation to closing. The word also refers to the agreement itself or the agreed terms and appears in expressions such as deal structure, deal breaker, and deal team (the team working on the transaction). Polish documents usually use the word transakcja, while the English word deal appears mostly in conversation and correspondence.

Deal breaker

Polish: dealbreaker

A deal breaker is a circumstance or demand that causes one party to abandon the transaction unless the issue is resolved. It may be a serious tax or legal risk found in due diligence, the loss of the largest customer, a missing regulatory approval, or a demand that the other party will not accept. Due diligence reports often flag such issues as red flags. Some can be resolved through a price reduction, a special indemnity, a condition precedent, or a change in the deal structure.

Friendly and hostile takeovers

Polish: przejęcie przyjazne i wrogie

A friendly takeover is an acquisition of control over a company with the support of its management, while a hostile takeover is an acquisition of control, or an attempt to acquire control, against the will of the target’s management. In a hostile takeover, the bidder goes directly to the shareholders: it announces a tender offer to buy or exchange shares, buys shares on the stock exchange, or solicits proxies to vote at the general meeting. Hostile takeovers mostly concern public companies. In a private company, the buyer can acquire shares from the shareholders despite opposition from the company’s governing bodies, but the articles of association can make a transfer of shares subject to the company’s consent or restrict it in another way (for example, Article 182 § 1 of the Polish Commercial Companies Code, KSH, for a limited liability company and Article 300³⁹ § 1 KSH for a simple joint-stock company). Within 14 days of the announcement of a tender offer for all the remaining shares, the management board of the Polish public company concerned must submit its position on the offer, with the grounds for it, to the Polish Financial Supervision Authority (KNF) and make it public. At the same time, it must present the position to representatives of the employee organizations at the company or, if there are none, directly to the employees in the manner customary at the company. Based on the information provided by the bidder in the tender offer, the position must include, in particular, an opinion on the offer’s impact on the company’s interests, including employment, and on the bidder’s strategic plans and their likely impact on employment and on the locations of the company’s operations. The management board must also state whether, in its view, the offered price corresponds to the company’s fair value, and historical share prices quoted on a regulated market cannot be the only measure of that value (Article 80(1) and (2) of the Public Offering Act). If the takeover proceeds through a tender offer, the management board usually supports the offer in a friendly takeover, while in a hostile one it may assess the offer negatively and take defensive measures. The articles of association of a Polish public company can, however, require the management board and the supervisory board to obtain the prior consent of the general meeting for actions taken during a tender offer for all the remaining shares with the aim of frustrating it. That requirement cannot cover actions aimed at bringing about a tender offer for the same shares by another party (Article 80a(1) and (2)).

Horizontal and vertical integration

Polish: integracja pozioma i pionowa

Horizontal integration is a merger or acquisition of businesses that are actual or potential competitors in the same market, such as two manufacturers of the same product. Vertical integration is a merger with or acquisition of a supplier (backward integration) or of a customer or distributor (forward integration). The first increases scale and market share, while the second gives control over supplies, costs, or access to customers. Horizontal integration can lessen competition by removing an independent competitor, and vertical integration by restricting rivals’ access to suppliers or customers.

Joint venture

Polish: wspólne przedsięwzięcie

A joint venture is cooperation between two or more businesses on a specific project or activity, most often through a jointly controlled company to which the partners may contribute capital or technology, provide access to their customers, or second employees. The partners’ rights, decision-making, funding, deadlock resolution, and the terms for ending the cooperation are set out in a shareholders’ agreement or, in a contractual joint venture without a separate company, in a cooperation agreement. The creation by businesses of a joint business entity may have to be notified to the President of UOKiK if the parties’ turnover exceeds the statutory thresholds, the concentration has or may have effects in Poland, and no exemption under Article 14 applies (Articles 1(2) and 13(2)(3) of the Competition and Consumer Protection Act).

Majority and minority stakes

Polish: pakiet większościowy i mniejszościowy

A majority stake consists of shares carrying more than half of the total votes at the shareholders’ meeting, and a minority stake carries less than half. In a 50/50 split, neither shareholder has a majority. A majority alone does not settle every decision. As a rule, amending the articles of association of a Polish limited liability company requires a two-thirds majority, and amending the articles of a joint-stock company a three-quarters majority (Articles 246 § 1 and 415 § 1 of the Commercial Companies Code, KSH). A shareholder of a limited liability company holding more than one third of the votes cast at the shareholders’ meeting can therefore block an amendment to its articles, and a joint-stock company shareholder holding more than one quarter of the votes cast at the general meeting can block an amendment to the articles of that company. A shareholders’ agreement can give the minority veto rights over reserved matters, but these bind only the parties, so to apply within the company they are also written into the articles of association. A transaction the company enters into without a consent required only by the articles is still valid, although the management board members may be liable to the company (Article 17 § 3 KSH). A minority stake is often valued with a discount for lack of control.

Merger

Polish: połączenie spółek

A merger is a procedure under the Polish Commercial Companies Code (KSH) in which the assets and liabilities of one or more companies pass to another company and the companies whose assets are transferred are dissolved without liquidation (Article 493 § 1 KSH). Under Article 492 § 1 KSH, a merger takes place either by acquisition, where the target’s assets pass to the acquiring company in exchange for shares granted to the target’s shareholders, or by forming a new company. As a rule, it requires a written merger plan and resolutions of the shareholders of each company, adopted by a three-quarters majority representing at least half of the share capital, or by a two-thirds majority in a public company, unless the articles of association set stricter requirements (Articles 498 and 506 §§ 1 and 2 KSH). Where one shareholder directly or indirectly holds all the shares in the merging companies, or the shareholders hold shares in the same proportions in all of them, the merger can take place without granting shares in the acquiring company (Article 515¹ § 1 KSH). An acquiring company that holds shares with a total nominal value of at least 90% of the target’s share capital does not need its own merger resolution unless it is a public company or a shareholder holding at least one-twentieth of its share capital demands one within one month of the publication of the merger plan. The same applies when it takes over its single-member subsidiary (Article 516 §§ 1, 2, 4, and 6 KSH). On the date the merger is registered, the acquiring or newly formed company succeeds to all the rights and obligations of the companies whose assets it took over (Articles 493 § 2 and 494 § 1 KSH).

Not to be confused with: acquisition.

Merger waves

Polish: fale fuzji i przejęć

Merger waves are periods in which the number and value of M&A transactions rise markedly and then fall. Authors differ on the number of waves. The framework used in our article distinguishes seven, from the 1897–1904 wave to the present, each dominated by a different type of deal: horizontal mergers creating monopolies, vertical integration, conglomerates, hostile takeovers and leveraged buyouts, cross-border and technology deals, private equity transactions, and, in the latest wave, industry consolidation built around technology. Each wave responded to the economic conditions of its time, regulatory change, technological progress, and the geopolitical situation.

More in the article “A historical perspective on mergers and acquisitions”.

Mergers and acquisitions, M&A

Polish: fuzje i przejęcia

Mergers and acquisitions (M&A) are transactions in which ownership of a company, a business, or part of a business changes, or two companies combine into one. They include buying and selling shares, acquiring a business or an organized part of it, mergers and demergers, joint ventures, and management and leveraged buyouts. In Poland, sales of shares and businesses are governed mainly by the Civil Code and the Commercial Companies Code (KSH), and mergers and demergers by the KSH. A concentration may require clearance from the President of UOKiK, the Polish competition authority, if it has or may have effects in Poland, the parties’ turnover exceeds the statutory thresholds, and no exemption from notification applies (Articles 1(2), 13, and 14 of the Competition and Consumer Protection Act). Concentrations with an EU dimension are reviewed by the European Commission.

More in the article “A historical perspective on mergers and acquisitions”.

Partial exit

Polish: sprzedaż części udziałów lub akcji / częściowe wyjście z inwestycji

A partial exit is a sale by the owner of only part of their shares, usually to a financial investor, after which the owner remains a shareholder and often continues to run the company. The owner receives cash for the shares sold, keeps the rest, and shares the risk of further growth with the investor. The terms of cooperation after the deal, including drag-along and tag-along rights, options, and the method of a future exit, are set out in the shareholders’ agreement. If the seller keeps less than half of the votes after the deal, the seller becomes a minority shareholder, and the investor can gain control even without a majority, for example through veto rights over strategic matters.

Post-merger integration, PMI

Polish: integracja po przejęciu

Post-merger integration (PMI) is the combining of the organizations, processes, systems, teams, and cultures of the buyer and the acquired business after closing, in order to achieve the expected synergies. It covers a plan for the first months after closing, decisions on structure and senior management, communication with employees and customers, aligning reporting and systems, and tracking synergies. Preparation starts before closing, but if the deal requires clearance from the President of UOKiK, the parties must refrain from implementing the concentration, including taking actual control of the target, until clearance is granted or the deadline for a decision expires (Article 97(1) of the Competition and Consumer Protection Act).

More in the article “10 key sources of post-merger value creation”.

Revenue synergies

Polish: synergie przychodowe

Revenue synergies are the additional sales that become possible after businesses combine, for example by offering one company’s products to the other’s customers (cross-selling), entering new markets through the partner’s network, or gaining greater pricing power with customers. They are harder to estimate and achieve than cost synergies, because they depend on customers’ decisions and competitors’ reactions. Their value is the present value of the expected incremental cash flows after operating costs, taxes, capital expenditures, and changes in working capital, discounted at a rate that reflects their risk. A buyer therefore counts them cautiously in the price, and parties that want to reflect them in the price can link part of it to future performance through an earnout, defining which revenue counts and how the buyer’s decisions affect it.

Not to be confused with: cost synergies.

Reverse takeover

Polish: przejęcie odwrotne

A reverse takeover, also called a reverse merger, is a transaction in which the shareholders of the company being acquired gain control of the formal acquirer, hence the name. It is most often used to take a private company public through a company that is already listed: the private company’s shareholders contribute its shares to the listed company in exchange for newly issued shares, or the two companies merge and the private company’s shareholders receive shares of the listed company. Either way, they gain control of the listed company, usually by obtaining a majority of the votes. It is an alternative to an IPO, but the transaction itself brings the company no cash, so funding for growth has to be raised separately, for example through a share issue for cash, and the private company’s shareholders need to investigate the listed company’s history. Issuing the new shares, admitting them to trading, and crossing voting thresholds trigger obligations under the public offering rules.

Spin-off

Polish: podział przez wydzielenie

A spin-off is the separation of part of a company’s business into another company whose shares go to the shareholders of the original company. Its closest Polish counterpart is “podział przez wydzielenie”, a division (demerger) of a capital company or a limited joint-stock partnership under the Commercial Companies Code (KSH) in which part of the assets of the company being divided passes to one or more existing or newly formed companies, and the shareholders of the company being divided receive shares in the acquiring or newly formed companies or in the company being divided itself (Articles 528 § 1 and 529 § 1(4) KSH). The company being divided continues to exist. If they receive shares in the acquiring or newly formed company, they become direct shareholders of the company running the separated business. The Code also provides for a division by separation (podział przez wyodrębnienie), in which the shares in the acquiring or new company are acquired by the company being divided itself (Article 529 § 1(5) KSH).

Not to be confused with: carve-out.

Polish: sprzedaż udziałów lub akcji

A stock purchase (share deal) is a transaction in which the buyer acquires a company’s shares from its shareholders, and the company remains the same entity with all its assets, contracts, and liabilities, including undisclosed ones. For shares of a joint-stock or simple joint-stock company recorded in a shareholder register, the buyer acquires them when it is entered in that register (Articles 328⁹ § 1 and 300³⁷ § 1 of the Commercial Companies Code, KSH). That is why the buyer investigates the company in due diligence and protects itself in the agreement with the seller’s representations and warranties and with special indemnities. A transfer of shares in a Polish limited liability company (sp. z o.o.) requires written form with notarized signatures, and in a company formed using the statutory template it can also be made using a template in the online system, with both parties signing with a qualified electronic signature, a trusted signature, or a personal signature (Article 180 §§ 1 and 2 KSH). The articles of association may make a transfer subject to the company’s consent or otherwise restrict it (Article 182 § 1 KSH). The transfer becomes effective against the company once it is notified of the transfer and given proof of it (Article 187 § 1 KSH). The buyer pays a 1% civil law transactions tax (PCC) on the market value of the shares (Articles 4(1), 6(1)(1), and 7(1)(1)(b) of the PCC Act), but the Act exempts, among others, sales of shares and other financial instruments to investment firms, including foreign ones, through them, or in organized trading (Article 9(9) of the PCC Act).

Not to be confused with: asset purchase, asset deal.

Strategic alliance

Polish: alians strategiczny

A strategic alliance is contractual cooperation between independent businesses, for example in sales, research, purchasing, or distribution, usually without forming a joint company or changing control, although one partner sometimes takes a small stake in the other, or the partners take small stakes in each other. The partners remain independent, and the scope of cooperation, the sharing of costs and benefits, confidentiality, and termination are set out in a contract. An alliance is sometimes a step toward a joint venture or an acquisition. An agreement between competitors must not breach the ban on anticompetitive agreements, for example by fixing prices or sharing markets (Article 6(1) of the Competition and Consumer Protection Act).

Synergies

Polish: synergie

Synergies are the additional value that combining two businesses can create beyond the sum of their separate values: lower costs, higher revenue, cheaper financing, or tax benefits. A strategic buyer estimates them when setting the price but is usually willing to pay the seller for only part of them, because the buyer bears the risk of achieving them and the integration costs. Cost synergies are easier to estimate and achieve than revenue synergies. The value that arises from the combination, when it exceeds the sum of the separate values, is called synergistic value, and the value of a business to a particular buyer, including the synergies available to it, is its investment value.

More in the articles “10 key sources of post-merger value creation” and “They beat the second-highest bid by PLN 21.4 million. Three years later they wrote down PLN 38.7 million”.

Target company

Polish: spółka przejmowana

A target company (target) is, in deal practice, the company or business that a buyer wants to acquire or take control of. It is called the target at every stage of the process, from the list of potential targets through due diligence to closing. The Polish Commercial Companies Code uses the Polish term “spółka przejmowana” in a narrower sense: the company whose assets pass to the acquiring company in a merger (Article 492 § 1(1) KSH). In a share deal, the target continues to exist as the same legal entity, while its shareholders change.

Walk-away price

Polish: cena graniczna

The walk-away price is the highest price a buyer is prepared to pay, or the lowest price a seller is prepared to accept, before abandoning the deal. Each party sets it before negotiations based on its own valuation and its best alternative to a negotiated agreement (BATNA). A buyer usually relies on its investment value, which includes synergies available only to it. Setting it in advance protects a buyer against overpaying under negotiating pressure and against the winner’s curse, and a seller against selling too cheaply. The walk-away price is not disclosed to the other side.

Winner’s curse

Polish: klątwa zwycięzcy

The winner’s curse is the tendency for an auction to be won by the bidder who most overestimated the value of the asset, so that winning often means overpaying. This applies especially when the asset is worth roughly the same to every bidder but none of them knows its value precisely. In acquisitions, it affects mainly auction processes with many bidders and buyers that assume high synergies. Protection comes from a walk-away price set before negotiations, a valuation based on cautious assumptions, and a readiness to withdraw from the process.

More in the article “They beat the second-highest bid by PLN 21.4 million. Three years later they wrote down PLN 38.7 million”.

If you are considering selling or acquiring a company, see the service page M&A Transactions (Mergers and Acquisitions).

Other sections of the glossary: Sale process and documents, Due diligence, Valuation, Price and settlement, SPA and risk allocation, Shareholders and investor rights, Financial statements and metrics, Stock exchange, Corporate banking. Index of all entries: M&A and corporate finance glossary.