EU Trends and Developments Contributed by: Vedran Obradović, Andrei Demian and Karoline Zehetmayer, LeitnerLaw Rechtsanwälte
LeitnerLaw Rechtsanwälte Schwarzenbergplatz 14 1040 Vienna Austria Tel: + 43 1 718 00 35 Email: office@leitnerlaw.eu Web: www.leitnerlaw.eu
Introduction Europe entered 2025 in a climate of persistent uncer - tainty. Macroeconomic pressures, geopolitical ten - sions and continued trade friction created a challeng - ing backdrop for dealmaking. Yet, contrary to earlier expectations, the market did not stall; it adapted. What emerged over the course of the year was a two- speed M&A environment. On the one hand, mid-mar - ket processes became slower, more diligence-heavy and increasingly structured around risk allocation. On the other hand, large strategic transactions surfaced in cases where buyers had strong conviction, clear industrial logic and access to reliable financing. For international investors, the key takeaway is that Europe remains an attractive but complex market. Successful transactions increasingly depend on early preparation, a clearly articulated investment thesis and the ability to manage regulatory and execution risks. Market Trends in Europe Macroeconomic and M&A market dynamics The European M&A market operated in 2025 under materially different conditions compared to the low- interest environment of previous years. While inflation began to stabilise, financing costs remained elevated and credit conditions more restrictive. Lenders applied stricter underwriting standards, with a stronger focus on downside protection, stable cash flows and clearly defined value-creation plans. As a result, highly lever - aged transactions and businesses with cyclical earn - ings profiles were subject to greater scrutiny, leading to a more disciplined and risk-aware market environ - ment.
Geopolitical developments, including trade tensions and supply chain adjustments, further influenced investor behaviour. Transactions continued, but with longer timelines, more complex valuation discussions and greater emphasis on execution risk. Against this backdrop, 2025 was marked by a clear divergence between deal volume and deal value. While transaction numbers remained below 2021– 2022 levels, overall deal value increased, driven by a limited number of large, strategically significant trans - actions led by well-capitalised buyers. This dynamic was particularly visible in Western Europe, where deal volume remained subdued and activity concentrated on larger, more complex transactions. In contrast to Western Europe, Central and Eastern Europe (CEE) emerged as a clear growth region. Deal volume increased to approximately 1,568 transactions in 2025, up from around 1,281 in 2024, while total deal value rose by more than 40% to approximately EUR 36.6 billion. This development was supported by consolidation trends, stronger economic momentum and continued inbound investment. As a result, CEE has developed beyond a traditional “spillover” mar - ket, with both deal volume and value reaching record levels in some datasets. The UK continued to act as a key deal hub, with activ - ity focused on transactions where risk could be clearly assessed and financed. Several continental markets saw a recovery in deal value, while the Nordics stood out for strong year-on-year growth, driven by sector mix and larger strategic transactions. In the DACH region, activity reflected a clear focus on high-quality assets, with buyers prioritising strategic fit and execu -
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