- Average M&A deal size rises to more than EUR 546 million — almost twice as much as for the full year 2025
- Add-on transactions now account for more than 58 per cent of all European PE deals
- DACH companies achieve some of the highest valuation multiples across Europe
- AI boom, dry powder and falling interest rates are driving the market — while regulatory and operational demands are increasing
- Digital sovereignty is emerging as a strategic factor in dealmaking
Frankfurt am Main, 08/06/2026 — Europe’s M&A and private equity market is entering 2026 with significantly larger and more selective transactions, and is regaining momentum. After several years of high interest rates, geopolitical uncertainty and cautious financing markets, there are increasing signs of recovery. At the same time, the current rebound is proving far more selective and complex than previous market cycles.
This is the conclusion of the new joint report, Executing in an Era of Market Complexities: European M&A and PE Trends and the Technology Imperative. Drooms, a leading European platform for secure digital due diligence and data rooms, and PitchBook, a leading provider of financial market data and analysis for the private capital and M&A sectors, analysed the key European M&A and PE markets of the past ten years for the report.
The number of European PE transactions reached 8,187 deals in 2025, coming close to a decade high. M&A activity also remained at a high level, with 18,485 transactions. This year, the market is already seeing significantly larger and more selective transactions: the average PE deal size in Europe stands at EUR 359.7 million year to date in 2026, up from EUR 289 million for the full year 2025; the average M&A deal size is currently even higher at EUR 546.3 million, compared with EUR 289 million in 2025. The main drivers are large technology, infrastructure and AI-related transactions.
At the same time, it is becoming clear that while individual mega-deals dominate the headlines and average deal sizes are rising, many financial investors are increasingly focusing on lower-risk add-on acquisitions. The share of these smaller strategic acquisitions has recently risen to more than 58 per cent of all European PE transactions.
“The market sentiment is improving, but investors are still acting with great discipline,” says Alexandre Grellier, Co-Founder and CEO of Drooms. “We are not seeing a broad-based M&A boom at the moment, but rather a market in which capital is flowing very selectively into high-quality assets, strategic technologies and existing platforms.”
DACH region remains a premium market for investors
According to the report, the German-speaking region is increasingly developing into the premium segment of the European market. With 2,858 M&A transactions in 2025, the region was once again among Europe’s most active and now ranks second behind the United Kingdom, with 4,545 M&A deals.
Traditionally, the Mittelstand has been the region’s mainstay. But DACH also remains in focus for international investors when it comes to larger deals. For example, the EUR 7 billion acquisition of STADA Arzneimittel by CapVest Partners was one of the largest European PE exit transactions of the year.
Investors are also paying particularly high prices here: with median M&A multiples of up to 13.5x EBITDA – especially in technology-driven sectors, software, industrial businesses and AI-related business models – DACH records the highest valuations among all European regions analysed.
Unlike more globally interconnected markets such as the United Kingdom or Ireland, DACH remains more firmly embedded within European capital structures. This reduces regulatory complexity in cross-border transactions and further strengthens the region’s appeal for long-term investors.
These high valuations also show how selective the European market has become. Capital is increasingly concentrating on companies with resilient business models, technological differentiation and a clear value-creation outlook. As a result, expectations of buyers and advisers are also rising: higher valuations, more complex regulatory requirements and the growing use of artificial intelligence are fundamentally changing due diligence and deal execution.
Behind the big mega-deals lies a market that is increasingly characterised by consolidation, buy-and-build strategies and operational complexity,” says Dorothy Chan, Analyst Custom Research at PitchBook and co-author of the report. “Many investors still have considerable financial reserves, but are investing much more selectively than they did during the period of low interest rates.”
AI and digital sovereignty are reshaping Europe’s deal market
Another key finding of the report is that the European M&A market is increasingly being shaped by issues such as AI infrastructure, data sovereignty and regulatory oversight. Pressure is growing to keep critical data, cloud infrastructure and AI applications more firmly under control within European legal frameworks and technology ecosystems. This development is affecting not only investment decisions, but increasingly operational processes in dealmaking itself.
“Digital sovereignty is evolving from a regulatory issue into an operational factor in transactions,” explains Grellier. “In particular, in sensitive due diligence processes and AI-supported workflows, financial investors and strategists are paying closer attention to where data is processed, which platforms are used and how regulatory requirements can be met.”
According to the report, this is also increasing the requirements for digital deal infrastructure. Modern data room and deal platforms must now not only be efficient and AI-capable, but also meet the highest standards of data security, compliance and European data sovereignty.
Despite growing market activity, the European deal market therefore remains characterised by a tension: on the one hand, falling interest rates, strong investment pressure and AI-driven growth expectations are creating fresh momentum. On the other hand, geopolitical uncertainty, financing costs and regulatory requirements remain key challenges for investors and companies.
The full report, “Executing in an Era of Market Complexities: European M&A and PE Trends and the Technology Imperative”, is available to download here:
