The CMS Corporate/M&A Group is pleased to launch the 17th edition of the European M&A Study. The CMS European M&A Study 2025 reveals how investors are navigating a buyer-friendly market, geopolitical uncertainty, and shifting regulatory landscapes. Despite ongoing economic and political uncertainties, M&A activity in Europe remains strong, with a positive outlook for 2025. The study highlights an evolving landscape where dealmakers are adapting to shifting risk allocation strategies, emerging technologies, and regulatory complexities.
Our Study dives into an impressive 582 private M&A deals that CMS advised in 27 European jurisdictions in 2024 and reports on deal trends and current market standards on risk allocation.
You can download the study here.
Key findings:
1. Pricing & structuring: Buyers play hard on value protection
Purchase price adjustments (PPAs) surged, reflecting buyers’ push for financial security amid market fluctuations.
Earn-outs gained traction, particularly in politically sensitive sectors like energy and technology, where regulatory uncertainty is a key concern.
2. Risk allocation: Buyers demand greater protection
MAC (Material Adverse Change) clauses are being deployed more frequently, particularly in transactions exposed to political shifts or regulatory intervention.
Buyers also negotiated longer limitation periods for warranty claims, reinforcing a growing emphasis on deal security.
3. W&I insurance: A key tool in the buyer-friendly market
W&I insurance usage increased by 8%, fuelled by declining premiums and broader adoption across mid-sized and large transactions.
The UK led the trend, with insurance playing a critical role in risk mitigation strategies.
4. ESG & AI: Theory vs. reality in M&A
Despite increasing regulatory focus, ESG considerations remain secondary in deal structuring.
AI is making deeper inroads, with 32% of legal tech applications in M&A transactions incorporating AI-driven tools.
In analysing the 2024 M&A market in Europe, we report on current market standards on risk allocation in M&A deals, comparing 2024 against 2023 and the previous 10-year average for 2014 – 2023.
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 Africa, LATAM, China, Asia Pacific and Middle East.
We hope the CMS European M&A Study 2025 will again be a useful guide for you in a more and more challenging investment climate.
Authors: Nick Crosbie, Tobias Grau, Bruce Harvie, Yella Schick.
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