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.
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. The Study shows the number of transactions CMS advised on in Central and Eastern Europe increased by more than 30% compared to 2023. Standout performers include Romania, which ranks as the second most active by deal count (18), registering an 80% increase compared with 2023.
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. The Study identifies a buyer-friendly shift in deal structuring, with the increased use of purchase price adjustments (PPA) and earn-outs, counterbalanced by a rise in warranty & indemnity (W&I) insurance — typically a seller-favourable trend.
Key findings and takeaways:
- Pricing & structuring: Buyers play hard on value protection
Purchase price adjustments (PPAs) surged, reflecting buyers’ push for financial security amid market fluctuations. The number of deals in CEE with PPA clauses increased by 10% from 2023.
Earn-outs gained traction, particularly in politically sensitive sectors like energy and technology, where regulatory uncertainty is a key concern.
- Risk allocation: Buyers demand greater protection
MAC (Material Adverse Change) clauses are being deployed more frequently, particularly in transactions exposed to political shifts or regulatory intervention. The highest number of deals with MAC clauses were registered in CEE at 32% of deals.
Buyers also negotiated longer limitation periods for warranty claims, reinforcing a growing emphasis on deal security. The majority of deals in CEE had limitation periods of more than 24 months, while most limitation periods within other European regions were for 24 months or less.
- W&I insurance: A key tool in the buyer-friendly market
W&I insurance usage increased by 8%, fuelled by declining premiums and broader adoption across mid-sized and large transactions.
The UK led the trend, with insurance playing a critical role in risk mitigation strategies. The use of W & I insurance also showed a small increase in CEE (up 3%).
- ESG & AI: Theory vs. reality in M&A
Despite increasing regulatory focus, ESG considerations remain secondary in deal structuring.
AI is making deeper inroads, with 32% of legal tech applications in M&A transactions incorporating AI-driven tools.
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.
Horea Popescu, Managing Partner of the Bucharest office and Head of the Corporate M&A practice in CEE, says: “In the current M&A landscape, investors must navigate the complex geopolitical environment and regulatory challenges, and the CMS European M&A Study 2025 highlights the importance of agility and thorough due diligence in securing successful transactions. Despite challenges, the CEE M&A market remained resilient. The number of deals CMS advised on in the region increased by more than 30% compared to 2023 and is the second highest number of deals since 2014. More than 45% of those were fuelled by strategic entry into new markets, showcasing the scope and strength of our M&A offering across the region.”
Rodica Manea, partner in the Corporate/M&A Team in CMS Bucharest, adds: “As buyers increasingly take the lead in M&A deals, the emphasis on risk allocation and financial security has never been greater. The increased use of purchase price adjustments and earn-outs reflects their push for financial security and value protection. The rise in W&I insurance usage further underscores the importance of risk mitigation strategies. Looking ahead, buyers must remain agile, balancing confidence in an evolving market with regulatory awareness to seize new opportunities in an evolving landscape.”
Louise Wallace, Head of the CMS Corporate/M&A Group, commented: “M&A isn’t just about transactions—it’s about strategy. Our latest Study captures the key dealmaking trends shaping 2025 and beyond, equipping clients with the insights they need to navigate complexity with confidence.”