BULGARIA Trends and Developments Contributed by: Yordan Naydenov and Hristian Gueorguiev, Boyanov & Co.
personal structure; however, since qualified majori - ties are required to be formed to get this job done, a larger consensus between the ruling parties and the opposition needs to be reached. Judging from the overly sharp tensions between the parliamentarily rep - resented parties, this prospect is still not visible on the horizon. The last government resigned in December 2025, less than a year after its formation, after a series of mass protests against its budgetary policy through - out the country. Despite Bulgaria’s full membership in the Schengen Area as of 1 January 2025 and its entry into the eurozone on 1 January 2026, Bulgaria has not yet left behind the era of political instability that has been typical of its internal affairs since 2020. A care - taker government was appointed in February 2026, and general elections were scheduled for April 2026. Was 2025 a Good Year for Bulgaria? An analysis of M&A in 2025 could largely indicate what sectors were of interest and what could be expected in 2026. The year marked a steady trend, as if confirm - ing the standard rule of thumb when it comes to M&A volumes for Bulgaria (70–80 acquisitions per year), indicating a slight decrease compared with 2024. As in previous years, the vast majority of corporate trans - fers were rather small in size, and outside of renew - able energy and technology companies, most buyers were local. The most attractive sectors for investment were technology and RES. In addition to those two industries, 2025 marked a visible and significant rise in interest in the healthcare sector. Predominantly, trans - actions were of a small scale in different industries – IT, healthcare, etc. IT and renewable energy continue to attract mostly foreign buyers, whereas the healthcare sector is so far almost entirely the domain of local investors. Another important trend that deserves to be noted is the ever-growing interest of local Bulgarian companies in, and the significant rise in, acquisitions made abroad – mainly in the territory of the EU. On a positive note, in contrast to 2024 when, for the first time in 15 years, there was no new M&A trans - action exceeding EUR100 million in value, in 2025, we witnessed a megadeal (>EUR100 million), which is a good indicator that there has been an uplift in the local M&A market. The driving force behind this deal was a well-known foreign participant, the US Advent International private equity fund, which has committed
to pay EUR300 million for the acquisition of TBI Bank AD – a top ten bank (9th position) operating in Bul - garia with a 4% market share in 2025, a 20% increase compared with 2024. The deal was announced in the spring of 2025 and was finalised in early 2026 due to the necessary regulatory approvals. In view of the relatively small size of the Bulgarian banking market, transactions of this type are rare and considered large. One of the biggest questions which remain open to this date is the sale of the assets of the Bulgarian subsidiaries of the sanctioned Russian oil giant Lukoil. Among its Bulgarian assets is an oil refinery situated near the town of Burgas, which is arguably one of the largest oil refineries in the Balkans and the largest industrial enterprise in Bulgaria. A “special commer - cial manager” – a government representative – was appointed to temporarily take over the management of the sanctioned refinery as it is considered a part of the Bulgarian critical infrastructure. Towards the end of January 2026, the Russian mother company announced that a preliminary agreement had been reached for the sale of its assets (including on a con - solidated basis) with The Carlyle Group. The same was announced with respect to another potential buyer – the Saudi Arabian company Midad Energy – which prompted some experts to call this compe - tition a “high-stakes race”. In view of the sanctions imposed on Lukoil by the US government, the posi - tion of Washington on the deal would be of primary significance. In terms of strategic investments, we cannot skip on the hot news that the German arms giant Rheinmetall will start production in Bulgaria after signing a contract with the state-owned VMZ to build a gunpowder and ammunition plant in the country. The two companies will create a joint venture (51% for Rheinmetall; 49% for the Bulgarian state) in which they will together invest nearly EUR1 billion. In addition to being the largest greenfield industrial investment in the country since the beginning of the transition of Bulgaria to democracy and a market economy in the late 1980s, the project is also of strategic importance due to the war in Ukraine and Europe’s efforts to strengthen its defence capabilities. The Bulgarian state plans to finance its part with funds from the European defence
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