CMS: Emerging Europe deal activity rebounds, reaching highest levels since 2018

Key points:
• Deal-making in the CEE region is increasingly buoyant.
• Transaction volume was up last year, and market conditions show potential for more deals to be done.
• The International Monetary Fund forecasts that European emerging market economies are anticipated to grow by 3.1% in 2025, compared with 1.4% in Europe’s advanced economies.
• Emerging Europe to benefit from sustained growth, a robust financial ecosystem, and an increasingly digitalized economy.

Findings from the CMS Emerging Europe M&A 2024/25 report, published today in cooperation with EMIS, demonstrate the resilience of the Emerging Europe deal market as activity rose to the highest levels since 2018. Market confidence has been bolstered by improving economic conditions and a greater sense of stability as inflation continues to subside, and central banks cautiously anticipate further interest rate cuts.

The report shows that deal flow in Emerging Europe increased by 8% compared with 2023, with 1,281 deals announced in 2024. However, despite higher deal volume, aggregate deal value fell by 30.9% to EUR 25.72bn. Values were impacted by the relative absence of “megadeals” valued at EUR 1bn or more. In 2024, there was a shift towards small and mid-market deals. Average deal value fell to EUR 20.1m in 2024 compared with EUR 31.4m in 2023.

Horea Popescu, Partner at CMS Romania, comments: “Despite some short-term challenges, deal-making in the CEE region remains attractive for international investors, as shown by higher deal volumes in a range of countries and sectors last year. As optimism looks set to become the hallmark of 2025, buyers will continue to capitalize on the region’s diverse investment opportunities.”

Cross border investment
Cross border deals remained strong with activity increasing to 776 deals, 31 higher than the previous year. Standout performers for M&A included the United States, which retained its top position by deal count (102), and the UK, which ranked as the second most active foreign investor (68) despite deal volume decreasing. Aggregate deal value reduced from EUR 35.5bn to EUR 23.3bn, with Luxembourg ranking in first place by deal value (EUR 2.01bn).

Country hotspots
Poland maintained its position as a major M&A market (269 deals at EUR 5.77bn) and Romania was the region’s second most active jurisdiction (187 deals), however, both saw overall reductions in deal volume compared with 2023. Countries where deal activity increased included Bulgaria (88 deals), Croatia (92 deals) and Hungary (63 deals), where volumes rose by 7.3%, 10.8% and 10.5% respectively. Several countries saw deal values fall compared with 2023, including Poland and Hungary, due to fewer megadeals. However, the Czech Republic and Slovakia present a more complex picture as deal volume fell by 7.2% (128 deals) and 14.6% (35 deals) respectively – but deal values jumped by 53.8% (EUR 5.65bn) and 25.5% (EUR 4.19bn).

Sector diversity
The report shows that there were significant shifts in the sectors driving deal activity. By recorded deal value, the largest sectors were Energy & Utilities, Real Estate & Construction and Food & Beverage. Energy & Utilities saw deal value increase by 162% (rising from EUR 3.72bn to EUR 9.75bn). Real Estate and Construction saw an increase in both deal volume (194, up from 158) and value (EUR 5.65bn, up by 77.2% from EUR 3.19bn).

Horea Popescu, Partner at CMS Romania, comments: “The M&A sector in the CEE region is continuing an exciting period of transformation, driven by regulatory changes, new technologies, energy transition, and developing business strategies.”

Rodica Manea, Partner at CMS Romania, comments: “Companies in the manufacturing and industrial sectors, particularly in Romania, as well as in the region, are leveraging acquisitions to enter new geographic markets, diversify their product lines, and enhance their technological capabilities.”

Private equity
In 2024, Emerging Europe saw private equity deal volume increase by 12.6% to 278 deals. However, reflecting the wider trend seen across the region, private equity deal value fell by 11.4% to EUR 13.88bn. Notable deals included Blackstone’s acquisition of a portfolio of ten logistics assets in the Czech Republic and Slovakia for EUR 470m and CVC Capital Partners’ acquisition of Partner in Pet Food (PPF) in Hungary for EUR 2.0bn, which was the largest transaction by value.

The CMS Emerging Europe M&A 2024/25 report can be found here.
Private Equity: The category includes deals with the participation of private equity firms, sovereign investment funds, pension funds, private investment companies, asset managers, supranational finance institution, and large investment banks.
Real Estate: The category includes deals for commercial properties, property developers, construction companies, and real estate investment funds.
Exclusions: Rumored or failed deals, ECM deals, convertibles issues, NPL deals, share buybacks, internal restructurings, joint ventures, and employee offers.
Domestic/Cross-border: By domestic deals we understand those where the target, buyer and seller are from the same country. By cross-border deals we understand those where at least two different countries on different sides of the deal are involved.
Deal inclusion and categorisation can be discretionary. The data can be subject to updates.
About CMS

Founded in 1999, CMS is an international organisation of independent law firms that offers full-service legal and tax advice. With 87 offices in over 49 countries across the world and more than 6,300 lawyers, CMS has longstanding 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, TMC, Tax, Banking & Finance, Commercial, Antitrust, Competition & Trade, Dispute Resolution, Employment & Pensions, Intellectual Property and Real Estate.