CMS European M&A Study 2023: Record number of deals last year despite challenging economic backdrop


The CMS Corporate/M&A Group is pleased to launch the 15th edition of the European M&A Study

It has been a challenging year for M&A in view of rising inflation and interest rates, slowing growth and increased geopolitical tension, which have added up to a difficult macroeconomic environment. However, there have been plenty of deal opportunities, as demonstrated by the fact that our study covers a record 509 M&A transactions on which CMS advised in 2022. In a difficult M&A market, we are pleased with this result, which reflects the strength of our corporate offering throughout Europe.

You can download the study here.


Key findings:

  • MAC clauses are still not very popular on European deals - despite some market commentary to the contrary, the European, MACs are certainly not back in Europe, with only 13% of deals having them. They are used even less on medium to large value deals. This is in stark contrast to the US, where MAC clauses are still incredibly common and were used on 98% of the deals.
  • The frequency of earn-outs has continued to rise, now applying in 27% of deals as compared to 14% in 2010 when CMS first analysed the use of earn-outs. This is coupled with a rise in the use of EBIT or EBITDA as the relevant measure for the earn-out applying in 54% of such transactions.
  • A more significant increase in the application of locked box arrangements (62% in 2022 compared with 51% in 2020). The increase is even higher for medium sized deals up to EUR 100m, where 79% of the deals were locked box transactions.
  • The popularity of W&I insurance has grown significantly over the last five years, particularly in the UK – albeit its application stabilised in 2022 at 32%. W&I cover is prevalent primarily in large deals with values over EUR 100m with W&I cover being obtained for 58% of those deals. The level of cover purchased varies, although a significant proportion of deals (nearly 40%) had cover of an amount equivalent to more than 30% of the purchase price.
  • ESG factors in M&A are becoming more relevant and important. Investors are facing pressures to uphold higher governance standards across all industries and geographical regions. It also seems likely that dealmakers want to capitalise on attractive ESG value creation opportunities. However, ESG aspects are only just beginning to appear specifically as part of the due diligence process (33% of deals) and in transaction documents (45%).


In analysing the 2022 M&A market in Europe, we report on current market standards on risk allocation in M&A deals, comparing 2022 against 2021 and the previous 12-year  average for 2010 – 2021.

The special features of this Study are as follows:

  • CMS European / US risk allocation comparison – we provide a headline analysis of the differing risk allocation on standard issues in European and US M&A.
  • CMS European regional differences – we highlight certain issues peculiar to one or more of the seven European regions covered.
  • CMS deal size analysis – we analysed our data against three different deal values: firstly, deals up to EUR 25m; secondly, deals in a value range of EUR 25m to EUR 100m; and thirdly, deals exceeding EUR 100m.
  • Special Commentary from CMS offices in LATAM, China, Africa, Asia Pacific and Middle East.

We hope the CMS European M&A Study 2023 will again be a useful guide for you in a more and more challenging investment climate.

Authors: Nick Crosbie, Tobias Grau, Patrick Speller