European dealmakers remain optimistic despite geopolitical uncertainty
European M&A activity is expected to increase over the next 12 months, despite geopolitical tensions and economic uncertainty. According to the latest edition of the European M&A Outlook by CMS and Mergermarket, nearly two-thirds of dealmakers (64%) expect M&A activity in Europe to rise in the coming year, up from 50% in last year's survey.
The report provides an overview of sentiment across the European mergers and acquisitions market. It is based on a survey of 250 corporate and private equity dealmakers from Europe, North America and Asia-Pacific and examines their expectations for European M&A activity over the next 12 months.
Megadeals drive higher deal values
The first half of 2026 presented a mixed picture. While the number of transactions declined by 5% compared with the same period in 2025, total deal value increased by 54% to EUR 723 billion. The increase was driven by a resurgence of megadeals, which accounted for a significant share of overall market activity.
Pieter van Duijvenvoorde, Partner and Head of the Corporate/M&A Group at CMS in the Netherlands, said: "Dealmakers rank the Benelux as the European region with the strongest M&A growth outlook. With a significant majority of respondents expecting European M&A activity to rise, with digitalisation as the biggest deal driver, the Netherlands is well placed to attract both domestic and cross-border investments. Challenges around inflation, valuation gaps and financing have not disappeared, but we see dealmakers responding with greater creativity in structuring transactions which will contribute to increase deal flow in the year ahead."
Financing conditions remain a concern
Despite growing confidence in the market, dealmakers continue to face challenges. More than a third of respondents (35%) identify inflationary and interest rate pressures as the biggest obstacle to M&A activity in Europe over the coming year. Valuation gaps between buyers and sellers and difficulties in obtaining financing are also expected to remain significant barriers.
At the same time, respondents continue to identify several drivers of M&A activity. On the buy-side, digitalisation is seen as the most important driver of transactions over the next 12 months, followed by turnaround opportunities and consolidation. On the sell-side, raising capital for expansion into faster-growing areas is expected to be a key motivation for dealmaking.
Private equity is expected to remain an important source of funding. Half of respondents believe it will be the most readily available source of finance in the coming year, ahead of cash reserves (42%) and bank lending (40%).
Benelux expected to lead growth
Dealmakers expect the Benelux region and the UK & Ireland to see the strongest growth in M&A activity over the next 12 months, with both regions cited by 38% of respondents. Southern European markets are also attracting increasing interest. Nearly a third of respondents (31%) rank Spain & Portugal among the regions expected to see the strongest growth, while 22% identify Italy as a leading market for M&A activity.
Interest from US buyers remains strong. Most respondents (95%) expect an increase in M&A activity involving US acquirers in Europe over the coming year.
Outlook for 2027
Despite geopolitical tensions and economic uncertainty, dealmakers remain focused on growth opportunities. Buyers continue to pursue digitalisation and turnaround opportunities, while sellers increasingly look to raise capital for investment in higher-growth areas.
The findings suggest that confidence in the European M&A market remains strong, supported by continued investor interest and expectations of rising deal activity across the region.
