European Insight – Market Trends in M&A
The latest M&A report by Datasite (in conjunction with partnership with Mergermarket) offers useful European insight into the headline trends that emerged in 2025 across the EMEA region.
Focused largely on ‘large cap’ transactions, 2025 was a year when dealmakers paid up for certainty, clear logic and strategic necessity, while much of the mid-market stayed stuck on the hard shoulder.
Start with the topline: aggregate EMEA deal value climbed 24.5% year-on-year to almost €1.2tn, even as deal volume slipped 3% to 19,097. In other words: fewer deals, bigger cheques, particularly in the second half of the year.
The context matters. The foreword paints a region jolted by “trade tantrums”: tariff uncertainty with the US, a temporary easing via an August pact (a 15% tariff ceiling on most EU exports), and then fresh policy flare-ups that made valuation and diligence harder, widened risk buffers, and pushed buyers toward structures like earn-outs to bridge gaps. Yet the punchline is resilience – deals still happened, just with more repricing of risk and more creativity in getting to yes.
The report’s forward-looking “heat chart” reinforces that the pipeline is broad, and not just a London–Frankfurt duet: 2,258 “for sale” stories across EMEA, led by DACH (407) and UK & Ireland (377), with Middle East & Africa (360) and CEE & SEE (295) close behind.
(Remember: This is focused on large cap companies – volumes in the lower and mid-cap space are hard to publicly track, and likely to be different. But the broad themes are likely to follow…).
Sector-wise, TMT leads the pipeline (497 stories), but notably, Europe’s tech dealflow is described as less AI-centric than the US, clustering instead around adjacencies like cybersecurity and SaaS and the economics of telecoms networks.
That theme – capital following “must-have” assets, runs right through the sector breakdown.
TMT was the headline act by value: €252.1bn in 2025, up to a multi-year high, despite a 9.7% fall in volume to 3,872 deals. The driver wasn’t an AI arms race so much as the grind of funding fibre, 5G and spectrum, plus demand for “critical” tech platforms (payments infrastructure, enterprise software, cybersecurity). Q4 alone produced €89.9bn, one of the biggest quarters on record. Private equity, unusually, was cautious here: buyout value slipped 6.2% to €78.6bn and volumes fell 18.4% to 1,070 – a striking contrast to PE’s enthusiasm elsewhere.
Financial services delivered the sharpest acceleration: value surged 81.6% to €188.7bn on 1,523 deals (+4.9% by volume). The report frames this as Europe’s banking and insurance “repairs” finally translating into consolidation – Italy still cleaning up, insurers bulking up to handle regulation and reinsurance, and banks reshaping footprints where capital intensity bites. Private equity also made noise here via exits: exit value jumped to €42.1bn, nearly four times 2024, helped by large sponsor disposals.
Industrials & chemicals is portrayed as policy-driven portfolio surgery. With Eurozone manufacturing stuck under pressure, corporates are shedding non-core assets and leaning into carve-outs, a natural hunting ground for PE. Value rose 33.9% to €161bn even as volume dipped 3.6% to 2,799. Private equity more than doubled deployment to €54.7bn (despite fewer buyouts), with mega and large-cap brackets doing much of the heavy lifting.
Pharma, medical & biotech was the standout on growth: value more than doubled to €124.2bn, while volume was broadly flat at 1,427 deals (-2.1%). The report’s diagnosis is blunt: Europe has a funding imbalance – late-stage VC tighter, IPO routes less dependable, so M&A and licensing become the release valve, with big pharma paying for de-risked assets and nearer-term returns.
The laggards are just as instructive. Energy, mining & utilities is described as structurally urgent – Europe’s grid bottleneck is now central to the transition, but activity cooled: volumes fell 16.9% to 1,004 and value dropped 29.8% to €93.8bn, even as the biggest deals clustered around transmission and financing solutions.
And real estate eased back after a rebound: volume fell 9.8% to 560 and value slipped 11.3% to €70bn, with listed REIT combinations framed as “public remedies” for discount-to-NAV fatigue and refinancing pain. The capital, when it moved, often moved toward defensives such as healthcare, primary care, social infrastructure, rather than bold cyclical bets.
Put it together and the report’s message is consistent: 2025 rewarded strategic clarity over deal-making bravado. Big balance sheets got deals done; smaller bidders wrestled with financing costs, execution overheads, and valuation gaps. The result is an M&A market that looked healthy in aggregate, but in 2025, increasingly concentrated at the top, and increasingly shaped by policy, infrastructure constraints, and the hunt for assets that can justify their price.
General consensus amongst the M&A & CF community is that sell-side activity in the mid-cap space, where smaller private companies come to market, will be a cautiously buoyant year for 2026.
As a small boutique, we have 5 x sale mandates coming to market through 2026 and see continued demand for high-competence support.
If you would like to understand the trends in your market, happy to have a no obligation discussion, contact us now.
Tags: 2025, EMEA, European, M&A, Market Trends
