M&A and Private Equity in Europe: Q1 2026 trends and outlook

The European Corporate Insight is back. The publication curated by Andersen’s European Corporate & M&A department, in its latest issue, analyzes Q1 2026 data on the M&A and Private Equity market in Europe which, as highlighted in previous months, remains fairly active but increasingly selective.

The figures show a total value of approximately €322.4 billion across 3.703 M&A transactions, and €44.1 billion across 1.278 Private Equity deals. A solid volume, with a feature already observed in recent months: a limited number of large deals account for the majority of total value.

European M&A Market: Stabilisation with Increasing Selectivity

In an increasingly selective environment, the European M&A market shows early signs of stabilisation. Financing conditions are gradually improving, although valuation gaps between buyers and sellers continue to represent a key obstacle, particularly in cross-border and mid-market transactions.

Geographic Concentration of Deals

The market remains concentrated in a small number of core jurisdictions. The United Kingdom leads by a significant margin (€135,5 billion across 685 deals), followed by Germany (€53,5 billion, 438 transactions) and Italy (€40,1 billion, 378 deals). Spain ranks high in terms of deal volume (335 transactions), although with lower aggregate value, reflecting a stronger focus on mid-market activity. Switzerland (€13,5 billion) and Luxembourg (€12 billion) stand out for their high average deal size, indicating the presence of large transactions despite lower volumes.

Key Sectors Driving M&A Value

Financial services remain the leading sector by value (€83,1 billion across 323 deals), supported by ongoing consolidation and large-scale transactions. Consumer Staples (€44,5 billion) and Energy & Power (€37,2 billion) also play a significant role, driven respectively by resilient demand and the energy transition. High Technology (674 deals) and Industrials (658 deals) lead by number of transactions, confirming a more fragmented but dynamic mid-market landscape.

Private Equity in Europe: Strong Activity, Selective Deployment

Private Equity shows a similar trajectory. Over the last twelve months, investments reached €153.5 billion across 5,523 transactions, although value distribution remains highly uneven. Peak activity was recorded in July 2025 (€18.8 billion), December 2025 (€24.1 billion) and February 2026 (€22.1 billion), highlighting the impact of individual large deals on aggregate figures.

Country-Level Dynamics

The United Kingdom stands out as the only market combining scale and continuity (406 deals, €10.6 billion). Luxembourg (€7.8 billion across 6 deals) and Iceland (€3.4 billion in a single transaction) illustrate how overall figures can be significantly influenced by isolated large deals.

Sector Focus: Industrials and Technology

Industrials lead Private Equity investments by value (€17.9 billion), while Technology dominates by volume (571 deals, €16.1 billion). Together, these sectors account for more than 77% of total investment, reflecting a concentrated approach to value creation. Healthcare maintains a balanced profile (€5.1 billion, 183 deals), with steady and consistent activity.

2026 Outlook: A Selective Recovery

Market expectations for the coming quarters point to a gradual recovery, albeit not uniformly distributed. Large-cap and well-structured transactions are expected to continue driving activity, supported by improving financing conditions and increased investor confidence in high-quality assets. The mid-market is likely to recover at a slower pace.

Key Factors to Monitor

• Cost of capital: interest rates remain elevated, limiting leverage
• Valuation alignment: persistent gap between buyer and seller expectations
• Regulatory environment: increased scrutiny and longer deal timelines
• Exit environment: constrained exit options, particularly in public markets

Structural Trends Shaping the Market

Several long-term trends continue to redefine the European M&A and Private Equity landscape:

• Artificial intelligence and digital infrastructure are attracting a growing share of investments, with Technology accounting for over 36% of total Private Equity value
• M&A is increasingly used as a strategic tool for portfolio repositioning, particularly in Financials and Industrials
• The energy transition continues to drive deal activity in Energy & Power, representing around 11% of total M&A value

Central and Eastern Europe: Expanding Deal Activity

Emerging markets such as Poland, Romania, Hungary and Turkey are becoming increasingly attractive to investors. Deal flow in these regions is primarily driven by technology, industrials and consumer sectors. Poland stands out for the depth of its domestic market, while Romania is experiencing progressive diversification. These developments confirm a gradual but structural eastward expansion of European deal-making activity.