M&A Insights Germany – 2025 Issue

In this issue we reflect on the 2025 transaction and M&A environment. We take a look back at what turned out to be a tense market environment in the year and offer a forward‑looking perspective on what to expect in 2026 as market dynamics continue to evolve.

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: The German M&A market softened slightly in 2025 as initial positive signals driven by domestic policies were overshadowed by rising geopolitical tensions and uncertainties throughout the year (e.g. tariffs). Strategic investors expanded their activity in 2025, whereas private equity deal volumes eased in light of extended holding periods. With improving visibility and more supportive market conditions, financial investors are anticipated to step up deployment as capital pressure builds.
Top deals: Top deals in 2025 include the sale of STADA Arzneimittel to Capvest Partners LLÜ (€10.0bn), the sale of a stake in TenneT GmbH & Co KG to NBIM, GIC and APG (€9.5bn) as well as the sale of Techem GmbH to an investor group comprising Partners Group Holding AG, GIC, TPG and Mubadala (€6.7bn).
Private equity: 2025 saw the strong return of large‑cap deals in Germany, with a rise in overall deal value and renewed momentum in industrial carve‑outs. In 2026, abundant dry powder and improving exit conditions are set to unlock further PE activity as valuation gaps narrow.
Industry segmentation: The deal landscape continued to be dominated by the technology sector which accounted for around 27% of deal volume, with PEs involved in more than two thirds of all transactions. While deal volume in Industrials remained almost unchanged year‑on‑year, deal value declined by 51%, primarily due to the absence of large transactions as seen in prior years. Looking forward, the growing relevance of carve‑outs and the continued strength of the defense sector provide positive indicators for 2026. Germany’s life sciences and healthcare sector continued its upward trajectory in deal value, marking the third consecutive year of growth, driven in particular by an increase in domestic M&A activity. The energy sector saw a strong increase in both deal volume and deal value compared to the prior year, underscoring the sector’s strong momentum, driven by structural trends such as the energy transition and rising demand for grid flexibility.
Market environment in 2025: Germany’s economy showed signs of gradual stabilization in 2025, with modest GDP growth, easing inflation and a supportive ECB policy backdrop. Financial markets remained buoyant, highlighted by the DAX’s steady rise reaching new highs at various times in the year. Valuations in the Energy sector increased notably in 2025 although most of the sectors in Germany remain on a discount to their US peers.
Outlook for 2026: Despite continued geopolitical uncertainty, confidence is steadily returning to the German M&A market, with deal activity expected to accelerate in 2026. At the same time, ongoing transformations across industries continue to fuel transaction demand with dealmakers adopting increasingly creative and sophisticated structures to navigate the challenging environment.

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