- UK recorded 4,545 M&A transactions in 2025 – the highest volume in Europe
- Average European M&A deal size rises to more than €546 million
- Add-on transactions now account for more than 58% of all European PE deals
- AI infrastructure, digital sovereignty, and regulatory complexity are reshaping European dealmaking
London / Frankfurt am Main, 8th June 2026 – Europe’s M&A and private equity market has entered 2026 with significantly larger and more selective transactions while regaining momentum. According to a new report by Drooms, a leading European due diligence platform, and PitchBook, the private capital financial research platform, the UK continues to strengthen its position as Europe’s dominant private markets hub, despite growing geopolitical and regulatory complexity across the region.
The report, “Executing in an Era of Market Complexities: European M&A and PE Trends and the Technology Imperative,” highlights how capital is increasingly focused on fewer but larger transactions, while investors simultaneously favour lower-risk add-on acquisitions and buy-and-build strategies.
According to the report, the number of European PE transactions reached a near-decade-high of 8,187 deals in 2025. M&A activity also remained elevated at 18,485 transactions. At the same time, 2026 is already seeing significantly larger and more selective transactions: the average PE deal size in Europe has risen to €359.7 million year-to-date, up from €289 million in full-year 2025, while the average M&A deal size now stands at €546.3 million.
The UK generated €292.3 billion in M&A deal value and €169.4 billion in PE deal value in 2025 – the highest levels of any European market analysed in the report. With 4,545 M&A deals and 1,857 PE transactions, the UK remains Europe’s most active private capital ecosystem by both value and volume.
Simultaneously, the structure of the market is evolving rapidly. Add-on activity reached 1,064 transactions in 2025 – more than in any other European region – underlining the growing importance of consolidation-driven value creation strategies.
“The market outlook is improving, but investors remain highly disciplined,” says Alexandre Grellier, founder and CEO of Drooms. “We are not seeing a broad-based M&A boom, but rather a market in which capital is flowing very selectively into high-quality assets, strategic technologies, and established platforms.”
While several large transactions continue to drive headline figures higher, the report notes that much of the underlying market remains focused on operational efficiency, consolidation, and strategic integration. The UK’s median M&A deal size stood at €25.6 million in 2025, compared with an average deal size of €317.6 million, highlighting how a relatively small number of major transactions continue to shape overall market value.
“Beneath the surface of the major megadeals, the market is increasingly shaped by consolidation, buy-and-build strategies, and growing operational complexity,” says Dorothy Chan, analyst at PitchBook and co-author of the report. “Many investors still hold significant dry powder, but they are investing far more selectively than during the low-interest-rate era.”
Digital sovereignty and AI infrastructure emerge as strategic themes
According to the report, the growing importance of AI infrastructure, cloud sovereignty, and data jurisdiction is reshaping both investment priorities and operational deal processes across Europe.
The UK illustrates both the strengths and trade-offs of Europe’s globally integrated technology ecosystem. While London remains one of Europe’s most important centres for AI talent, growth financing, and private capital activity, the report also points to increasing strategic debates around domestic technology capabilities, scale-up funding, and dependence on cross-border capital.
“Digital sovereignty is no longer just a regulatory discussion – it is becoming an operational imperative for dealmakers,” Grellier says. “Investors and corporates are paying much closer attention to where sensitive transaction data is stored, how AI is integrated into workflows as a necessity for growth and productivity, and which legal jurisdictions govern the platforms they rely on.”
The report concludes that modern deal infrastructure must now meet significantly higher expectations around compliance, data security, and AI governance – particularly as European regulators place greater emphasis on technological sovereignty and secure digital ecosystems.
Even as market activity recovers, Europe’s deal environment remains increasingly complex: lower interest rates and AI-driven investment themes are supporting renewed momentum, while geopolitical uncertainty, financing conditions, and regulatory demands continue to shape investor behaviour.
The full report “Executing in an Era of Market Complexities: European M&A and PE Trends and the Technology Imperative” can be found here:
