Investing in CEE: Inbound M&A report 2024/2025

The past 12 months proved to be very challenging for M&A dealmakers, with tighter financing, stubborn valuation gaps and political instability complicating deal execution. Against this background, the aggregate value of M&A transactions in Central and Eastern Europe (CEE) declined precipitously in 2024, even as total deal volume rose marginally year-on-year.

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Key findings

• Despite geopolitical and macroeconomic headwinds, deal volume in Central and Eastern Europe (CEE) held up relatively well in 2024;
• There were 1,270 transactions in the region in the past year;
• The aggregate value of M&A activity amounted to €27.4bn;
• Regional hotspots were held by Poland, Austria, and Romania, the CEE region’s top M&A deal generators in terms of volume in 2024, a pattern that has remained unchanged over the past three years;
• Sector focus was powered by innovative tech and sturdy industrials assets, the top attractions for inbound dealmakers in 2024. The technology sector generated the greatest number of deals, contributing a grand total of 216 transactions (representing 17% of all activity), of which nearly two-thirds (133) were led by bidders from outside the region. After technology, the next biggest contributor to inbound M&A was the industrials sector, with a total of 82 deals by non-CEE acquirers;
• Deal multiples among lowest on recent record. The median EV/EBITDA deal multiple for the CEE region (across all sectors) was 6.7x in 2023/24, according to Mergermarket data. This compares with 9.4x for the rest of Europe, though the gap between those multiples has narrowed over the last three years.

Outlook for the coming months

Looking ahead, there are many reasons to keep an optimistic outlook. Financing conditions in the CEE region are improving, albeit slowly, with central banks committed to monetary easing. This should help to improve exit conditions and close the valuation gaps that blighted markets in 2024.

There is also growing optimism about the prospects for peace in Ukraine. The desire to end the war is increasingly strong, although it is not yet clear how this might be achieved or what form it may take. The end of hostilities would have many positive implications, among them reduced risk premiums. Inbound investors are not waiting for the war to end: a growing number are already investing in Ukraine’s reconstruction, as we show in this report.

The momentum behind EU enlargement is building. This is good news for Ukraine and for the Western Balkan nations that are not yet members. The European Commission recently restated its commitment to expansion, describing it as a top priority. The promise of enlargement is already making a difference. 

In the meantime, the growth outlook for the region is increasingly upbeat. Most CEE countries are expected to achieve GDP growth of more than 2% in 2025 – well ahead of the leading economies in neighbouring Western Europe. This – coupled with the CEE region’s attractive targets, consolidation opportunities and skilled labour force – augurs relatively well for M&A in the year ahead.

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