Hungary’s M&A landscape in Q3 2025 delivered a mix of resilience and recalibration. While dealmaking slowed in terms of volume, the market saw a sharp rise in value as both domestic and international investors pursued selective, high-impact opportunities aligned with government priorities and industrial strategy.

Economic Context: A market navigating headwinds

Hungary’s macroeconomic backdrop remains challenging. GDP growth for 2025 has been revised down to 1%, reflecting soft domestic demand and a cooling external environment. Inflation is easing but remains elevated at 4%, constraining household spending and adding pressure to the interest-rate environment. Meanwhile, the budget deficit, which is projected at 4.5% of GDP, continues to push the government toward targeted investment and consolidation in strategic sectors.

These dynamics have not halted dealmaking, but they have reshaped its character. Buyers are more selective, financing conditions remain tight, and the state has become an increasingly central participant in major transactions.

M&A activity: Value over volume

Hungary recorded 14 transactions in Q3, a 22.2% yoy decline, consistent with the broader drop in volume across EMEA. Yet aggregate deal value surged to €700 million, more than tripling year-on-year. This divergence reflects a clear shift toward fewer but larger, strategically important deals.

For investors, the message is clear: competitive processes are increasingly focused on assets with scale, geopolitical relevance, or industrial importance. Smaller transactions, particularly in consumer, non-core manufacturing, and early-stage tech, have slowed as valuation expectations and financing hurdles widen the bid-ask gap.

Government influence and cross-border appetite

State-backed or state-aligned entities continue to shape Hungary’s M&A narrative. The €241 million investment by iG TECH Capital into 4iG Space & Defence Technologies illustrates the government’s push to strengthen domestic capabilities in defense, cybersecurity, and satellite technologies. Similarly, LG Chem’s €173 million acquisition of a stake in LG Toray Hungary Battery Separator underscores Hungary’s strategic positioning in the EV and energy storage supply chain.

International investor interest remains solid. South Korea and the US were among the top bidders by value in Q3, reflecting sustained confidence in Hungary’s role as a cost-competitive manufacturing hub. Automotive, battery technology, and electronics remain high-priority sectors for cross-border strategics, and nearshoring trends could continue to support deal pipelines into 2026.

EMEA alignment and outlook

Hungary mirrors the overarching EMEA theme: declining volumes alongside rising values, with activity concentrated in sectors that benefit from geopolitical relevance, technological importance, or direct government support. Central and Eastern Europe continues to stand out as a key manufacturing and nearshoring region, with Hungary well-positioned to capture investment flows as companies re-evaluate supply chain risk.

Looking ahead, dealmakers could expect continued activity in energy, defense, and industrial technology, while mid-market deal flow will likely remain sensitive to financing costs and valuation pressures.

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Want to dive deeper into the numbers and sector insights? Read Deal Drivers: EMEA Q3 2025 and explore detailed analysis, heat charts, and deal pipelines for the Netherlands and EMEA.