FRANCE TRENDS AND DEVELOPMENTS Contributed by: Hugo Sanchez de la Espada, Véronique Millischer, Olivia Chriqui-Guiot, Robin Gaulier and Aurore Cormary, Baker McKenzie
Summary The French M&A market is undergoing a deep trans - formation. After several years of record activity, the market has – since 2024 – shifted from a seller’s envi - ronment to a buyer’s market, with declining target valuations and a growing number of assets struggling to achieve previous price levels. These changes are reflected in the French market through investor selec - tivity, prolonged holding periods, and a persistent gap between buyer and seller expectations. At the same time, the French M&A market is currently impacted by both domestic and international economic and politi - cal contexts. Persistent uncertainty, including slower growth, expected higher fiscal pressures, and a com - plex political landscape ahead of the 2027 presiden - tial elections, should continue to weigh on the French M&A market. Despite these challenges, M&A activity in France remained dynamic throughout the first nine months of 2025 and managed to grow. The French M&A market is currently driven by cross-border deals, particularly by French outbound deals, while the purely domestic market struggles; the first three quarters of 2025 saw a certain number of premium large-cap transactions. Looking ahead to 2026, the French M&A market is expected to continue to be shaped by global eco - nomic and political uncertainty. While volatility is likely to persist, France remains an attractive and resilient market for M&A, thanks to its strong talent base and sophisticated buyout environment. The country’s mature ecosystem and breadth of growing companies ensure that, despite short-term challenges, France remains a key hub for M&A activity in Europe.
and regulations. The focus on sustainability and ESG criteria should also shape the regulatory landscape, with new EU regulations about ESG financial informa - tion underway. Technological advancements and innovation The rapid pace of technological advancements and innovation should continue to drive M&A activity in France. Companies are expected to seek to acquire technological capabilities to stay competitive in the market. The focus on digital transformation, AI and cybersecurity should drive acquisitions in the technol - ogy sector. Additionally, the increasing importance of data analytics and automation should shape the M&A landscape in the coming years. Particularly, AI should remain a key driver of M&A in France, but recent stud - ies and market signals highlight growing doubts about the sector’s profitability and real impact. The risk of an AI bubble is increasingly discussed, suggesting inves - The growing emphasis on sustainability and ESG fac - tors should continue to influence M&A transactions in France. Companies are increasingly considering ESG criteria in their investment decisions, which should impact the types of deals being made. The focus on sustainable and responsible investing reflects a broader trend in the business world, where companies are prioritising long-term value creation and ethical considerations. Green and climate-focused invest - ments are expected to remain attractive in the French M&A market in 2026, particularly in the renewables segment. tors may become more cautious in 2026. Sustainability and ESG considerations
235 CHAMBERS.COM
Powered by FlippingBook