Mega-dealmakers shrug off geopolitical shocks

• Despite a bout of global shocks, dealmakers remain confident about Europe’s M&A prospects for the year ahead.
• Deal volume in H1 2026 reached almost 9,500, down 5% from the same period in 2025.
• Despite this dip in volume, aggregate deal value in H1 soared to EUR 723bn, a 54% year-on-year increase, reflecting a surge of megadeals.
• In our survey of 250 Corporate and Private Equity dealmakers, almost two-thirds of respondents (64%) expect M&A levels in Europe to rise in the next 12 months – up from last year, when half forecast an increase.
• Over a third of the respondents (35%) say inflationary and interest rate pressures will be the biggest obstacle to dealmaking in Europe in the coming year. Vendor/Acquirer valuations gaps (33%) and financing difficulties (27%) are also identified as persistent concerns.
• On the buy-side, respondents identify digitalisation (33%) and turnaround opportunities (30%) as crucial drivers of M&A, while raising capital for expansion in faster growing areas (49%) and a pick-up in valuations (42%) are expected to be key motivators on the sell-side.
• Most respondents (88%) have noticed a jump in M&A activity in Europe led by US bidders over the last 12 months, and 95% expect that interest to increase in the year to come.
• Respondents expect the Benelux region (38%) and the UK & Ireland (also 38%) to see the highest M&A growth in the next 12 months. These are followed by Iberia (31%) and Italy (22%), comfortably ahead of France and Germany, reflecting broader economic confidence in Southern Europe.
• Half of respondents believe that private equity will be the most available source of finance in the next 12 months, followed by cash reserves (42%) and bank lending (40%).

Thursday, 10 September 2026: According to CMS’s 2027 European M&A Outlook, almost two-thirds of dealmakers expect the level of European M&A activity to increase over the next 12 months, in spite of geopolitical turmoil. The Outlook was published today in association with financial data firm Mergermarket.

Despite the outbreak of war in Iran and the attendant Hormuz crisis – precipitating higher energy prices and renewed inflation – M&A in Europe enjoyed a busy H1. Transaction volume was down just 5% compared to the same period in 2025, but the real story can be found at the top of the deal market – aggregate value climbed by a towering 54% year-on-year, reaching EUR 723bn. Evidently, megadeals were back in force.

Louise Wallace, Head of the CMS Corporate/M&A Group, said: “Optimism prevails amongst dealmakers, despite sometimes challenging and unpredictable circumstances. The reasons behind M&A, including digitalisation, raising capital to fund growth, making the most of distressed opportunities and the narrowing of valuation gaps between buyers and sellers are sparking enthusiasm – we hope potential brakes of elevated interest rates and challenging financing in some sectors do not dampen that optimism in 2027.”

CEE Overview

In H1 2026, CEE M&A deal value increased by 4% year-on-year to EUR 20.6bn, while deal volume reached 526, down 15% from the same period in 2025. While deal count has declined, the uptick in value signals continued appetite for meaningful transactions in the region.

Sentiment towards the region remains polarised. Among survey respondents, 6% place CEE first for the strongest anticipated M&A growth in Europe, while 10% rank it first for the lowest growth, reflecting the divided views. CEE is identified by 7% of respondents as the leading investment destination in the coming year.

Horea Popescu, CMS Managing Director for Central and Eastern Europe and Managing Partner CMS Romania, commented: “Central and Eastern Europe continues to demonstrate resilience. While deal volumes declined more than the European average, the increase in deal value shows investors remain committed to meaningful transactions in CEE. With 95% of survey respondents expecting greater US buyer interest in European assets, CEE stands to benefit as acquirers look beyond Western Europe for value.”

Rodica Manea, Corporate Partner at CMS Romania, stated: “Even amid geopolitical volatility and tighter financing conditions, Romania remains firmly on investors' radar. The Polpharma acquisition of Biofarm signals that international buyers see value in our market. Technology and energy are driving M&A expectations across Europe, and Romania is well positioned to capture its share.”

Digitalisation and rising valuations

According to respondents, digitalisation will be the principle buy-side driver of M&A in Europe over the next 12 months, with 33% citing this in their top two and 18% ranking this first, a result consistent with rising digital investment and artificial intelligence outlays. Turnaround opportunities come in second place overall (30%) while consolidation is third (27%).

In a reversal from our last study, when capital raising for expansion in faster growing areas was expected to be the least important sell-side M&A driver, this factor comes out as the most significant this year, cited by 49% of respondents overall.

Financing pains

Over half of respondents (58%) believe financing conditions in Europe will worsen over the next 12 months, reflecting interest rate pressures and tightening credit standards in the region. However, this figure does nevertheless represent a marked improvement from our previous survey, when more than three-quarters of dealmakers (78%) expected financing conditions to deteriorate.

Regarding key sources of capital, half of respondents believe private equity will be the most available financing source over the coming year, given the still-enormous stores of dry powder available to sponsors and the pressure on private equity firms to put that capital to work.

Southern pivot

Though respondents continue to highlight Benelux and the UK & Ireland as the two regions that will see the highest M&A growth over the next 12 months, Southern European markets have recently climbed into dealmakers’ estimations. Nearly a third (31%) of respondents rank Iberia in their top two for accelerating M&A, while 22% say the same of Italy, which last year ranked second bottom. With GDP growth rates in Southern Europe handily exceeding the euro area average, the region is affirming its reputation as a magnet for international M&A.

US influx

Reflecting rising appetite among US buyers for European assets – where targets generally carry less steep valuations than their equivalents in the US might – most respondents (88%) say they have seen more US buyers active in the region over the past 12 months. Respondents expect this cross-Atlantic trend to continue: 95% anticipate seeing more interest from US buyers in European assets over the coming year.

Outlook for 2027

Though megadeals took all the headlines in H1 2026, European M&A over the coming 12 months appears more likely to skew towards value investments. Buyers are on the lookout for turnaround opportunities and are emphasising creative solutions to close valuation gaps. Sellers, meanwhile, are focusing on core business resilience, including considering divestments of peripheral units and raising capital to reinvest in higher-growth segments.

Read the full CMS European M&A Outlook 2027 here: https://cms.law/en/int/publication/cms-european-m-a-outlook-2027