M&A Insights Germany - Issue March 2025

Twice a year we report on the German transaction market and provide insights into the top deals that have shaped the market. We also comment on the sectors that have seen particularly high transaction activity and highlight future trends.

In this issue:

• M&A activity: M&A activity experienced a slow start in the first half of 2024 but recovered in the latter half of the year with an increase in deal value of +45% compared to 2023. The increase was driven by a number of “megadeals”, plus the need for corporate transformation and a desire among financial investors to deploy existing dry powder.
• Top deals: 2024 was impacted by several high-value deals, such as the acquisitions of Covestro AG, Schenker AG and Altair Engineering. The top 10 deals accounted for more than half of the total deal value disclosed.
• Industry segmentation: The tech sector continued to play a key role in the deal landscape in 2024, with companies active in areas such as GenAI, cybersecurity and data analytics gaining investor attention. Life sciences and healthcare saw a strong recovery in deal activity in the second half of the year, particularly in areas such as immunology and targeted oncology. The industrial sector was mainly dominated by strategic investors, with the acquisition of Schenker AG by its Danish competitor DSV being one of the key deals of the year for the German market.
• Private equity: PE activity in Germany declined slightly in 2024 as investors remained cautious despite interest rate cuts and lower inflation. However, deal value rose significantly (+62%), with large transactions in the energy and technology spaces.
• M&A trends: There is an increasing shift towards alternative deal structures in the German M&A market, with joint ventures and minority investments gaining traction among dealmakers. IPOs in Germany are expected to increase in 2025 and gain popularity among investors as a viable exit option. Reducing inflation and declining interest rates in the Euro area should also boost investor confidence and help drive M&A activity in Germany.
• German targets attract international investors: The share of inbound deals has increased as international investors take advantage of lower valuations in the German capital market, especially in tech and other high-growth sectors. Additional factors include unresolved succession planning among German family-owned businesses and the need for consolidation in the German M&A market.