CMS, with one of the largest Corporate/M&A legal practices in Europe, has released the 17th edition of its European M&A Study, offering exclusive insights into the evolving deal landscape.
The Study reflects the opinions of 330 corporates and PE firms based in Europe, the Americas and APAC about their expectations for the year ahead.
With an unprecedented 582 private M&A transactions across 27 European jurisdictions, the Study reveals how investors are navigating a buyer-friendly market, heightened geopolitical uncertainty and evolving regulatory landscapes.
Key market trends: M&A resilience in a changing political and economic climate
Despite ongoing political and economic challenges, M&A activity in 2024 remained strong, with a notable increase in the complexity of deal structuring. Nearly two-thirds of respondents expect an increase in European M&A over the next 12 months, a major reversal from last year’s study when only 3% forecasted a significant increase.
Generally, 50% of respondents rank TMT as their top choice for growth in M&A activity in Europe over the next 12 months. A distant second is energy sector.
Key findings and takeaways:
Transaction’s value vs. volume: balancing in-between
After shifting to smaller deals in late 2022 and early 2023, dealmakers appear to have reverted in 2024 to a more concentrated activity in larger transactions – a sign of confidence returning gradually to the market.
Pricing & structuring: Buyers play hard on value protection
The study identifies a buyer-friendly shift in deal structuring, with the increased use of purchase price adjustments (PPA) reflecting buyers’ push for financial security amid market fluctuations.
Earn-outs also gained traction, particularly in politically sensitive sectors like energy and technology, where regulatory uncertainty is a key concern.
MAC (Material Adverse Change) clauses are being deployed more frequently, particularly in transactions exposed to political shifts or regulatory intervention.
Buyers also negotiated longer limitation periods for warranty claims, reinforcing a growing emphasis on deal security. However, this is counterbalanced by an increased use of W&I insurance (increase by 8% compared to a previous year). The UK led the trend, with insurance playing a critical role in risk mitigation strategies.
ESG & AI: Theory vs. reality in M&A
Despite increasing regulatory focus, ESG considerations remain secondary in deal structuring. At the same time, 91% of respondents expect scrutiny of ESG factors in M&A deals to increase.
AI is making deeper inroads, with 32% of legal tech applications in M&A transactions incorporating AI-driven tools. The increasing significance of AI is underlined by the entry into force of the European Union’s AI Act in August 2024 and its gradual applicability from February 2025.
Geopolitical and Economic Factors
Compared to previous years, fewer respondents identify the war in Ukraine (12%) or political instability in Eastern Europe (14%) as major obstacles to M&A. Notwithstanding the ongoing war, Ukraine remains a key focus for the European M&A market. Overall, a significant increase in deal number in Ukraine shows the resilience of its economy and attractiveness for investors even during the war times. The most active sectors for investments in Ukraine are Telecom & IT, Real Estate & Construction, Mining, Energy & Utilities and Logistics.
Looking ahead: Confidence in an evolving market
With M&A deal flow stabilising and debt markets improving, 2025 is set to bring new opportunities for strategic investors. However, buyers must remain agile, balancing market optimism with heightened due diligence and regulatory awareness.
Read the full CMS European M&A Study 2025 here: LINK.
For further information, please contact:
Darina Gordienko
E: darina.gordienko@cms-cmno.com
T: +38044 391 3377
Notes to editors:
CMS
Founded in 1999, CMS is an international organisation of independent law firms that offers full-service legal and tax advice. With 84 offices in over 45 countries across the world and more than 5,800 lawyers, CMS has long-standing expertise both in advising in its local jurisdictions and across borders. From major multinationals and mid-caps to enterprising start-ups, CMS provides the technical rigour, strategic excellence and long-term partnership to keep each client ahead in its chosen markets.
The CMS member firms provide a wide range of expertise across 19 practice areas and sectors, including Corporate / M&A, Energy & Climate Change, Funds, Life Sciences & Healthcare, TMC, Tax, Banking & Finance, Commercial, Antitrust, Competition & Trade, Dispute Resolution, Employment & Pensions, Intellectual Property and Real Estate
For more information, please visit cms.law.
