Is the European M&A and private equity market really “back”? Or are a few headline deals hiding a more fragile reality? In our recent webinar, “European M&A and PE trends 2026: executing in a complex market”, Drooms CEO Alexandre Grellier was joined by Dorothy Chan (Analyst, PitchBook), Pierre‑Antoine Lac (Investment Banking Director, Barclays), Tobias Grau (Partner, CMS) and moderator Jasper Radü (Member of the Board, PB3C) to unpack what the data is really telling us – and what it means for dealmakers across Europe.
The discussion drew on the joint Drooms x PitchBook report on European M&A and PE trends and combined it with first‑hand perspectives from banking and legal practitioners active in the market today.
Volumes rebound, but the recovery is narrow
On the surface, the picture looks encouraging. Transaction volumes in European M&A and PE have climbed back towards near decade highs, and aggregate capital invested has risen sharply compared with the post‑pandemic trough. Yet the panel agreed that this rebound is far from broad‑based.
Dorothy Chan summed it up: “At the surface level, the data clearly indicate a rebound – but when we look at deal sizes, multiples and sector focus, what we actually see is a much narrower recovery.” Headline numbers are heavily skewed by a small number of very large deals, while mid‑market transactions – the industry’s everyday “bread and butter” – remain significantly softer. For many buyers and sellers, geopolitical uncertainty, valuation gaps and higher funding costs still weigh on confidence and slow down decision‑making.
Add‑ons become the dominant playbook
One of the clearest structural shifts highlighted in the webinar is the rise of add‑on strategies as a core value creation lever in European buyouts. Over the past decade, the share of add‑ons in total buyout activity has steadily increased, with investors using bolt‑on acquisitions to build scale, expand into adjacent markets and extract synergies.
From a legal perspective, Tobias Grau described this dual nature: “Add‑on strategies are both defensive and offensive – you can finance smaller pieces more easily, but by integrating them you create a bigger group that can ultimately be sold at a higher price.” This trend has both defensive and offensive dimensions. Smaller tickets are easier to finance and can spread risk in uncertain times, but they also allow sponsors to engineer higher exit valuations by integrating multiple assets into a larger platform. The flip side is complexity: running several deals in parallel and integrating multiple teams, cultures and systems demands more discipline, stronger governance and highly structured post‑merger integration.
Digital sovereignty and AI reshape opportunity – and risk
Beyond traditional sector plays, the webinar explored how digital sovereignty and AI are reshaping the European deal landscape. Sovereignty agendas in major markets such as Germany, France, Italy and Spain are driving demand for European‑built technologies – from cloud infrastructure and large language models to trusted data platforms – that reduce dependency on non‑European providers.
For investors, this creates attractive opportunities in niches where policy priorities and market demand align, particularly in AI, cybersecurity and data infrastructure. At the same time, it raises the bar in due diligence. Buyers are no longer satisfied with asking whether a target is compliant on paper; they want to know whether it is AI‑ready, cyber‑resilient and genuinely digital‑sovereign in how it stores, processes and analyses data. As Alexandre Grellier noted, “Data has finally been recognised as a critical competitive asset – essentially the oil of the future – and that’s why investors are now willing to pay a premium for security and digital sovereignty.” Weaknesses in these areas can now be genuine valuation risks.
Due diligence gets deeper – and more data‑driven
Across the panel, there was consensus that deals are taking longer and becoming more complex, even when capital is available and the strategic rationale is clear. Legal and banking advisors report more extensive documentation requests, deeper analysis across multiple scenarios and a stronger focus on technology, data protection and cybersecurity.
Here, the banking perspective is crucial. Pierre‑Antoine Lac observed: “A few very large transactions are pushing volumes up, but mid‑size deals are still muted – which means more scrutiny on every process and a stronger need for quick access to information through technology and data rooms.” This is where technology – and in particular AI‑enhanced virtual data rooms – is starting to make a tangible difference. By centralising information, structuring documentation and enabling secure, local AI analysis within a trusted European environment, platforms like Drooms help buyers and sellers manage the rising complexity without simply throwing more people at the problem. AI is not a magic button – human judgement remains critical – but it can significantly accelerate document organization, review, Q&A and scenario analysis when deployed responsibly.
What this means for dealmakers
The overarching message from the webinar is that European M&A and PE are in a phase of selective, complex recovery rather than a straightforward boom. Activity is back, but it is concentrated in specific sectors and strategies; add‑ons and platform builds are becoming the norm; and digital sovereignty, AI readiness and cyber resilience are now core components of both value and risk.
For dealmakers, success will require:
- More nuanced views on valuation and risk in different sectors and regions
- Clear strategies for using add‑ons to build scale without losing control of integration
- Stronger focus on technology, data and digital sovereignty in due diligence
- The right tools and partners to handle growing documentation, Q&A and regulatory complexity
Watch the recording
If you would like to dive deeper into the data, hear the panel’s sector‑by‑sector outlook, or revisit specific audience questions, you can watch the full webinar recording here:
