European M&A market remains stable with continued buyer‑friendly trends

The European M&A market remained stable in 2025, despite ongoing economic and political uncertainty. This is according to the latest annual European M&A Study by international law firm CMS.

The study provides insights into 601 transactions in which CMS was involved in 2025. Overall, the findings show that the market remained buyer‑friendly. Earn‑outs were used more frequently, particularly those based on EBIT and EBITDA, while the use of purchase price adjustments (PPAs) largely remained in line with 2024.

Key findings and takeaways:

• Buyer and seller trends remained largely unchanged. Strategic and financial investors together accounted for 96% of all buyers. The share of strategic buyers declined slightly to 69%, while financial buyers increased their share to 27%, underlining the continued importance of private equity. On the sell‑side, the proportion of strategic sellers rose to 48%, while financial investors, management and private sellers were slightly less represented than in 2024.
   
• The use of AI tools in M&A transactions continued to increase. AI was used in 60% of deals, doubling compared to the previous year. In 72% of cases, this contributed to a more efficient transaction process. Technology is expected to become an increasingly integral part of M&A deals.
   
• Price‑related deal terms remained in line with 2024. The use of purchase price adjustments (PPAs) remained stable, while earn‑outs, particularly those based on EBIT and EBITDA, were applied more frequently. This confirms the continuation of the buyer‑friendly trend seen over the past year.
   
• Shifts in risk allocation were limited. De minimis and basket thresholds increased slightly in favour of sellers, and longer warranty periods were more common. Liability caps and security for claims largely remained unchanged compared to 2024.

This indicates that while deal terms continue to evolve, there have been no fundamental changes. Buyers and sellers are operating within familiar structures, with targeted adjustments to better manage risk and value.

Louise Wallace, Head of the CMS Corporate/M&A Group, comments: “By closing more than two deals in Europe every day of the week, CMS is able to provide this unique study to benefit clients and the market. Buyers are in their element and AI is changing the way deals are carried out to improve efficiency.”

Roman Tarlavski, Partner Corporate/M&A at CMS in Amsterdam, adds: “It is encouraging to see that the number of deals in 2025 has remained at 2024 levels (which has seen a sharp increase from the year before). We also observe a rise in the number of large transactions, which is often a precursor to further growth in M&A activity. Whether this trend will continue depends largely on geopolitical developments and the associated economic uncertainty.”

Conclusion:
The 2025 results point to a stable European M&A market in which buyer‑friendly trends persist without major structural changes. This suggests a disciplined approach to dealmaking in an environment characterised by ongoing economic and geopolitical uncertainty.

CMS remains committed to providing clients with strategic, data-driven insights to navigate the complexities of cross-border transactions with confidence.

Read the full CMS European M&A Study 2026 here:
https://cms.law/en/int/publication/m-a-study-2026