European M&A and Private Equity: Q2 2026 Market Overview
Between April and June 2026, announced mergers and acquisitions across Europe reached €262.5 billion across 3,315 transactions. Private equity investments—funds acquiring stakes in companies to drive growth before exiting—added a further €30.6 billion. These figures come from the latest European Corporate Insight, the quarterly report produced by Andersen’s European Corporate & M&A team.
The market has not slowed down, but it has become significantly more selective. Fewer deals are being completed, while those that do close tend to be considerably larger.
Fewer Deals, Larger Transactions
The number of transactions has been declining for the past year. By June 2026, only 972 deals were announced—the lowest monthly figure in the previous twelve months—compared with more than 1,900 deals per month during the summer of 2025.
Despite this decline in volume, overall deal value has remained resilient. March 2026 was the strongest month of the period, with €163.8 billion in announced transactions.
The explanation is straightforward: investors are no longer pursuing acquisitions in volume. Instead, they are concentrating capital on a limited number of highly strategic opportunities. Companies with solid fundamentals and strong market positioning continue to attract buyers, while businesses seeking unrealistic valuations often struggle to find investors.
The United Kingdom, Germany and Italy Lead the European Market
The three largest M&A markets during the quarter were:
United Kingdom: €76.7 billion across 523 transactions
Germany: €60.6 billion across 380 transactions
Italy: €40.3 billion across 415 transactions
Ireland represents a distinctive case. With only 66 transactions, it generated €21.7 billion in deal value, highlighting the impact of a small number of exceptionally large transactions.
Spain presents the opposite profile. While it recorded 252 transactions, overall deal value remained relatively modest, reflecting a market driven primarily by small and medium-sized businesses.
Europe’s Most Active Sectors
The quarter confirmed several clear sector trends:
Financial Services: €54.1 billion, making it the highest-value sector, supported by major consolidation activity.
Industrials: €49.4 billion across 619 transactions.
Technology: €35.9 billion across 630 transactions, the highest deal count of any sector.
Real Estate: €31.6 billion, marking one of the strongest quarters in recent years.
Energy and Healthcare: €17.8 billion and €16.6 billion respectively, supported by the energy transition and sustained demand for essential services.
Private Equity Remains Highly Selective
Private equity investors are following the same strategy—perhaps even more decisively.
The United Kingdom alone accounted for more than 40% of all European private equity investment, attracting €12.5 billion during the quarter. Three sectors—technology, healthcare and industrials—captured approximately three quarters of total investment.
The energy sector stands out in particular: €2.95 billion was invested across only 12 transactions, suggesting that funds are targeting large-scale energy infrastructure projects rather than numerous smaller companies.
Italy: Financial Services Drive Growth While the Mid-Market Remains Strong
Italy ranked third in Europe by deal value and second by transaction volume, ahead of Germany in the number of announced deals.
Three key trends emerge from the data.
- First, financial services consolidation continues to drive the market. Transactions in the financial sector reached €35.4 billion, four times the value recorded one year earlier, representing the largest share of Italy’s quarterly M&A activity.
- Second, mid-market companies remain the backbone of Italian dealmaking. The country’s 415 transactions reflect a steady flow of industrial and technology acquisitions that continues regardless of headline-grabbing mega-deals.
- Third, private equity still has significant room for expansion. Investment funds committed just €412 million in Italy during the quarter. While this remains modest, the sectors attracting capital across Europe—energy, manufacturing and healthcare—are precisely those in which Italy enjoys strong competitive advantages. Rather than indicating weakness, this points to considerable untapped potential.
What to Expect in the Coming Months
The outlook for the second half of 2026 is cautiously optimistic. Activity is expected to strengthen gradually, although growth is unlikely to be uniform across sectors and countries.
Three factors will largely determine market momentum:
- Financing costs. Following the ECB’s June interest rate increase, acquisitions remain more expensive to finance, particularly mid-market transactions.
- Valuation gaps. Buyers and sellers continue to have differing price expectations, which remains the primary reason many negotiations fail to reach completion.
- Regulation and geopolitics. More stringent regulatory scrutiny and ongoing geopolitical uncertainty are extending due diligence processes and delaying deal completion.
Looking beyond the short term, several structural themes are expected to continue attracting investment: artificial intelligence and digital infrastructure, defensive sectors such as healthcare and energy, and the growing tendency for companies to buy and sell businesses not only to expand but also to reshape and optimise their portfolios.
Markets to Watch
Beyond the three leading countries, the report highlights Ireland, Sweden, Denmark and Finland as markets to watch.
These economies combine political and economic stability with highly innovative ecosystems and strong positions in sectors currently attracting the greatest share of investment, including technology, life sciences, renewable energy and advanced manufacturing.
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