EMEA M&A had a mixed 2025 with variations emerging across different countries in the region after a tumultuous year dominated by tariff and geopolitical uncertainty.

Europe saw a 1% decrease in annual deal value to $524 billion, according to Boston Consulting Group (BCG), while the Middle East posted a 3% year-on-year uplift to $21 billion. African M&A markets had a tough year, as deal value dropped 14% to $12 billion.

Moving into 2026, the outlook for EMEA activity is more upbeat, with an M&A “heatmap” analysis by Datasite and Mergermarket tracking 1,833 for-sale stories – 15% up on the count of 1,591 for-sale deal reports registered at the beginning of 2025.   

M&A activity, however, is expected to follow a similar pattern in 2026, with an anticipated rise in activity unlikely to play out uniformly across all jurisdictions in the region.

European deal flow to focus on domestic resilience

European dealmakers are set to prioritize technology, financial and industrial resilience as policymakers move to secure strategic industry supply chains and technology independence.

TMT is set to be the most active market, with 391 for-sale reports, highlighting Europe’s focus on investing in digital infrastructure and technology capability. Indeed, there are favorable public sector tailwinds behind M&A investment in the sector. The European Chips Act, for example, will see €43 billion of public investment into semiconductor manufacturing, with the aim of doubling Europe’s global semiconductor market share to 20% by 2030. This will drive consolidation, inbound investment, and joint venture deal flow.

Another active sector will be financial services, where consolidation in banking and insurance builds on momentum from 2025, where deal highlights included UniCredit building a stake in Commerzbank, Group BCPE acquiring Novo Banco and the merger of insurers Helvetia and Baloise.

Dealmakers see value in investing to form larger, more resilient financial institutions with the scale to manage intensifying technology and sustainability demands that are more challenging for smaller organizations, according to Goldman Sachs.

The North-South divide

These macro themes will direct headline M&A activity in Europe, but dealmakers will also have to navigate the emergence of a two-tier market European market, where Northern Europe is showing low growth, while Southern Europe is moving on an upward trajectory.

France, traditionally one of Europe’s M&A powerhouses, for example, has only 106 for-sale stories, and trails Italy (165) and Iberia (156).

France’s deal markets have been hampered by political instability and a mushrooming budget deficit. Spain, by contrast, is forecast to be the fastest growing economy in the Euro Area in 2026, while a settled government in Rome has seen Italy’s credit rating upgraded, and the delta between the spreads on Italian and German bonds narrow to less the 1%, the smallest gap in 15 years.

German-speaking Europe, the continent’s most powerful economic hub, is set to remain the biggest engine for M&A, with 336 for-sale stories recorded. Digitalization and strength in engineering and industrials will be the primary drivers, but the picture is mixed, with a chunk of anticipated transactions set to flow from stressed and distressed assets.

Diversification and dynamism to boost Middle East M&A

The Middle East and Africa, meanwhile, are positioned as among the most dynamic jurisdictions in EMEA for M&A, with 260 for-sale stories registered.

The Gulf states are particularly influential, with sovereign wealth funds participating as active investors in global mega deals, such as the record $55 billion buyout of US video game company Electronic Arts, as well partnering with global private markets firms to invest in technology and digital infrastructure assets, as seen in the partnership between Saudi-based AI business Humain and Blackstone-backed data center group AirTrunk to build data centers in the Kingdom.

Gulf states are also investing domestically to diversify economies dominated by oil and gas, and build-out capacity in AI, infrastructure, and energy transition, according to law firm A&O Shearman.

The Gulf is also playing an influential role in Africa’s M&A markets, with the UAE committing billions to build digital infrastructure across the continent.

Outside of digital infrastructure investment, energy and natural resources are expected to be the most active segments for dealmaking in Africa, according to BCG, with private capital firms dipping into the market to make selective investments agriculture and healthcare.

Looking ahead

Looking ahead, the outlook for EMEA M&A is broadly positive. AI innovation, digital infrastructure investment and strategic consolidation all bode well for transaction flow, as do stable interest rates and inflation in Europe, the region’s biggest market.

Geopolitical complexity, renewed tariff uncertainty, and concern around AI asset valuations, however, remain very much in the frame. EMEA dealmakers have appetite to transact but are expected to narrow their focus on deals that deliver strategic value and position their organizations to build supply chain resilience and adapt to technological change.