After a year defined by fluctuations and shifting investor sentiment, global dealmaking seems to be entering a period of recalibration rather than retreat. Early optimism sparked by the change in the US administration was short-lived, dampened by trade-policy headlines and geopolitical flashpoints that briefly stalled transaction pipelines. Yet by the third quarter, momentum began to rebuild. At the recent M&A Market Insider: Inside European Investment Banking event in Prague, Alistair Lester, Jacek Chwedoruk, Bozidar Djelic, Yunus Yucehan, and Markus Schiller discussed how these dynamics are playing out in Central and Eastern Europe (CEE), including the Czech Republic’s role, where activity has started to recover despite macro volatility, and what it means for the region going forward.

Resilience and growth

Several signals point to resilience, particularly in the Czech Republic. Local groups are demonstrating strong capital-formation capacity and domestic investors are stepping into a void left by more cautious international players. At the same time, geopolitical tensions, from Ukraine to the Middle East, have paradoxically fostered a more pragmatic and adaptive transactional environment. Since mid-summer, market participants have recalibrated their expectations and moved ahead with well-structured deals rather than waiting for conditions reminiscent of 2021’s peak.

By late summer, this shift in behavior was unmistakable. Sellers became more realistic, buyers more selective, and both more attuned to the realities of operating amid persistent uncertainty. European deal volumes are now expected to finish the year roughly 20% higher than in the prior 12 months, reinforcing the view that CEE, anchored by the Czech Republic, may be entering a phase of disciplined but durable growth in dealmaking.

Shaping the next phase of M&A

The region’s renewed momentum is not merely cyclical; it is fueled by structural strengths, evolving investor profiles, and sectoral shifts that increasingly place the Czech Republic at the center of CEE dealmaking. The country has emerged as a meaningful business hub, recording €45 billion in registered deals this year, up from €32 billion the year prior. At the same time, Central European (CE) investors deployed €96 billion outside the region, exceeding the €85 billion that Western investors directed into CE markets. This reversal underscores the expanding influence of CE-based capital in Western Europe and the imperative for market participants to understand these new investment corridors.

The Czech Republic’s role within CEE is distinguished by a blend of adaptability, outward orientation, and disciplined capital deployment. Traditionally overshadowed by larger neighbors, it has used its comparatively smaller domestic market as a catalyst to scale abroad, with Czech groups actively targeting opportunities in Western and Southern Europe, including France and Spain. Behind this trend are regional champions operating across multiple jurisdictions and executing pan-European strategies rather than confining their ambitions to the immediate region.

Although the absolute number of transactions remains modest, the maturity of Czech dealmaking is reflected in its strategic cross-border investments and its propensity to reinvest domestically. Illustrative examples include companies such as Goldman Lottery, which has grown from a national player into a global leader in gaming, and ETH, which has expanded into retail and logistics to build internationally significant operations.

A defining feature of the Czech ecosystem is the collaborative approach among local groups, which has helped sustain capital formation and entrepreneurial growth. This cohesion is less apparent elsewhere in CEE and has contributed to the country’s comparatively high stock of outbound investment, which is now exceeding that of much larger Poland. Combined with the broader challenges of Europe’s fragmented public equity markets, these dynamics reinforce the Czech Republic’s distinctive position and its potential to shape the next phase of CEE transaction activity.

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