Back in Gear: CMS European M&A Outlook 2025

The report offers a comprehensive assessment of dealmaking sentiment in Europe’s M&A market and reflects the opinions of 330 corporates and PE firms based in Europe, the Americas and APAC about their expectations for the year ahead.

After a challenging couple of years for European M&A activity, we are starting to see signs of a recovery. With deal values up in H1 2024, and a focus among dealmakers on larger transactions, our survey paints a picture of more optimism about the prospects for 2025.

With interest rates and inflation coming down from their peaks, plus more visibility on how companies have performed against a difficult backdrop, the uncertainty that plagued the market is beginning to dissipate.

However, our survey does point to some obstacles. Difficulties raising finance as banks rein in their lending, recent dips in company performance, and a stubborn gap between buyer and seller price expectations are some of the key challenges that dealmakers report. Scrutiny of environmental, social & governance (ESG) factors is also projected to mount. Diversity, equity & inclusion (DEI) initiatives are likewise coming to the fore.

Nonetheless, nearly two-thirds of respondents expect an increase in European M&A over the next 12 months. Dealmakers in the region are also forecasting an increase in activity led by overseas acquirers, especially from bidders based in the Middle East. It looks as though Europe’s M&A engines are getting back in gear.

Key findings of the report include:

• Respondents are optimistic about M&A activity. Nearly two-thirds expect European M&A to increase over the next 12 months, a major reversal from last year’s study when only 3% forecast a significant increase.
• The UK & Ireland ranks as both highest and lowest region for M&A growth expectations. Respondents are split, with 32% placing it in top spot for anticipated M&A growth, but 31% saying it will see lowest growth.
• Valuations gaps are a persistent issue for dealmakers. Price expectations between buyers and sellers continue to diverge, with 34% ranking this among their top two major obstacles to European M&A activity over the next 12 months.

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