Zabka’s $1.62 Billion IPO: A Turning Point for Warsaw’s Market

Zabka’s IPO and Legal Market in CEE

Greenberg Traurig advised Polish convenience store chain Zabka and CVC Capital Partners on Zabka’s initial public offering (IPO) valued at 6.45 billion zlotys ($1.62 billion) on the Warsaw Stock Exchange in October. Lejb Fogelman, a shareholder at Greenberg Traurig, called the IPO a significant breakthrough. He suggested it could signal the end of a period with few large deals, as the Warsaw market recovers from challenges posed by COVID-19 and the war in Ukraine.

Fogelman expressed hope that this IPO would encourage more deals in the future. Despite recent closures of offices by firms like Hogan Lovells in Warsaw, Greenberg Traurig is expanding. They recently hired a seven-lawyer project and structured finance team, raising their Warsaw lawyer count to around 110.

Other law firms like A&O Shearman, Bird & Bird, Dentons, CMS, and DWF also remain active in Poland and Central and Eastern Europe (CEE). CMS, the largest firm in the EU by headcount, describes its Polish office as the stronghold of its CEE operations.

Market Changes Over Time

Many law firms entered the CEE market in the 1990s, following post-Soviet growth. However, the business climate has shifted. Over the last 15 years, notable exits include Freshfields in Bratislava and Hogan Lovells in Prague. Recently, Noerr’s offices in Warsaw and Hungary became independent firms, and others transitioned to Kinstellar.

Some firms, however, remain committed. Linklaters, for instance, has maintained its Poland office despite exiting several other locations. Eversheds Sutherland even started a new arbitration practice in Warsaw.

As foreign investment has declined, many law firms have followed suit. Firms like Weil have exited several CEE markets as their strategies focus on more profitable regions like New York and London.

Differing Perspectives on Growth

While some firms, including Freshfields, view potential growth in Eastern Europe as limited, others see opportunities. DWF has tripled in size since 2018, while local knowledge and competitive pricing allow them to thrive.

The rise of local firms in Poland has changed the competitive landscape. Former lawyers from international firms now work at national firms, increasing competition for international deals. Karol Kicun from Reon Legal believes Poland has the potential for a legal market comparable to Germany’s.

In conclusion, while the CEE legal market faces challenges, firms like Greenberg Traurig and DWF showcase growth potential by adapting to local dynamics and maintaining a strong presence.