The Road to Recovery: European M&A Outlook 2022

Dealmakers say PE best placed to flourish in the next 12 months

A brighter outlook: 53% of respondents expect European M&A activity to increase over the next 12 months (compared to only 2% last year)

Low valuations and distress: 24% see undervalued targets as the most important buy-side driver of M&A activity. 22% identify distressed-driven M&A as the most important catalyst for sell-side activity.

Private equity in pole position: 71% agree that financial buyers are better placed than strategic buyers to take advantage of buying opportunities in the post-lockdown revival.

71% of dealmakers agree that private equity (PE) firms are better placed than corporates to take advantage of buying opportunities presented by COVID-19, according to the ninth edition of the European M&A Outlook, published by CMS in association with Mergermarket.

The report offers a comprehensive assessment of dealmaking sentiment in Europe’s M&A market. It reflects the opinions of 330 corporates and PE firms based in Europe, the Americas and APAC about their expectations for the European M&A market in the year ahead.

Horea Popescu, Head of CEE Corporate M&A at CMS and Managing Partner of CMS Romania, said: “The CMS-Mergermarket study is an efficient tool for measuring expectations in the M&A market, and this year’s edition confirms the growing trend in investor confidence regarding existing opportunities in the European M&A market. Despite the restrictions imposed by the COVID-19 pandemic, the flow of M&A transactions was maintained. In the first half of 2021, M&A activity in Central and Eastern Europe increased by more than 50% in volume and 54% in value compared to the same period last year, a trend that we hope the market will maintain in the next period, given that confidence and investment appetite remain at high levels. In Romania we continue to rely on the sectors that have been growth drivers recently, such as software and IT services, energy (especially energy from renewable sources), the health/pharmaceutical industry and technology.

Louise Wallace, Head of the CMS Corporate/M&A Group, commented: “PE firms have limited timeframes to deploy capital so are expected to move quickly to get deployment levels back on schedule. Whilst corporates are currently focusing on reopening offices and sites as COVID-19 restrictions ease, we expect greater activity from these strategic buyers as well as from the European and US SPACs keen to deploy capital.”

While financial buyers may be better placed than strategic buyers, more than half of survey respondents expect the overall level of European M&A activity to increase over the next 12 months, with both corporates and PE firms eager to make up for lost time. This stands in stark contrast to last year’s poll, in which 78% of interviewees were preparing for a decrease in M&A.

“The COVID-19 vaccine roll-out has been the real game changer, allowing countries to reopen and supporting a revival in economic growth,” said Stefan Brunnschweiler, Co-Head of the CMS Corporate/M&A Group, adding, “While the pandemic is far from over, vaccine programmes have been effective at limiting the impact of the virus, enabling investment and a return to growth.”

Although asset prices have held up through the pandemic and vast government stimulus has kept businesses from insolvency, almost a quarter of respondents (24%) see undervalued targets as the most important buy-side driver of M&A activity over the next 12 months. A similar share (22%) identifies distressed-driven M&A as the most important catalyst for sell-side activity.

Survey respondents see this as only the beginning, with 72% expecting ESG scrutiny to increase during the next three years, and 65% predicting that due diligence will focus more on ESG factors over the same period.

Rodica Manea, Corporate Partner at CMS Romania, said: „The pandemic drove rapid change in the business and financial environment, including M&A transactions. Most tools for remote deal-making, such as virtual data rooms and teleconference negotiations, were already in place before the pandemic, but COVID-19 broke through the last of the resistance and necessitated the acceptance of virtual meetings. Progress has been made in legislative changes to facilitate contactless arrangements, including digital filings and use of electronic signatures. Also, the pandemic has highlighted how business profitability is inextricably linked to public health and social and environmental stability, prompting dealmakers to build ESG criteria into their M&A strategies and due diligence.

Sector-wise, Technology, Media and Telecommunications (TMT) is among the sectors set to continue to dominate dealmaking. “In H2 2021, we expect TMT M&A to maintain the strong pace observed during the first six months of the year,” explained Ignacio Zarzalejos, Partner at CMS Spain. “Dealmaking in the space will continue to rise, and TMT will stand out as one of the main sectors for M&A.”


In Q2 2021, Mergermarket surveyed senior executives from 240 corporates and 90 PE firms based in Europe, the Americas and APAC regions about their expectations for the European M&A market in the year ahead.

Among the 330 executives interviewed, 70% are headquartered in Europe, while the remaining 30% are equally split between the Americas and APAC regions. All respondents have been involved in an M&A transaction over the past two years and 67% of all respondents plan to undertake an M&A transaction in the coming year. All responses are anonymous, and results are presented in aggregate.

About CMS

Founded in 1999, CMS is an integrated, multi-jurisdictional organisation of law firms that offers full-service legal and tax advice. With more than 70 offices in over 40 countries across the world and more than 5.000 lawyers, CMS has long-standing expertise both in advising in its local jurisdictions and across borders. From major multinationals and mid-caps to enterprising start-ups, CMS provides the technical rigour, strategic excellence and long-term partnership to keep each client ahead in its chosen markets.

The CMS member firms provide a wide range of expertise across 19 practice areas and sectors, including Corporate/M&A, Energy & Climate Change, Funds, Life Sciences & Healthcare, TMT, Tax, Banking & Finance, Commercial, Competition & EU, Dispute Resolution, Employment & Pensions, Intellectual Property, Real Estate, Consumer Products and Hotels & Leisure.

About Mergermarket

In M&A, information is the most valuable currency. Mergermarket, an Acuris company, reports on deals 6-24 months before they become public knowledge, giving our subscribers a powerful competitive advantage. With the largest network of dedicated M&A journalists and analysts, Mergermarket offers the most comprehensive M&A intelligence service available today. Our reporters are based in 67 locations across the Americas, Europe, Asia-Pacific, the Middle East and Africa.