Pullach, April 01, 2025 – The German Mergers & Acquisitions Association (BM&A) today publishes the results of the M&A Climate Monitor for the first quarter of 2025, which was conducted in collaboration with the University of Bristol. The study shows that sentiment for the German M&A market remains gloomy. While the assessments for Europe and globally are moderately positive, the assessment of the economic situation in Germany remains cautious. Only 17% of respondents expect positive economic development in Germany, compared to 26.4% for Europe and 43.7% globally.
Significant differences by market segment
Market development is assessed differently depending on company size. The micro and small cap segment is slightly more optimistic than in 2024, while sentiment in the mid and especially the large cap segment has deteriorated further. Rising valuations are expected in the coming months. This may increase the completion rate and the willingness to start sales processes.
Motives for transactions: Focus on growth and market position
The main motives for acquisitions remain the strengthening of the market position and access to new markets. Know-how and technology factors also play a decisive role. This strategic orientation signals that companies are continuing to focus on expansion rather than primarily realizing cost synergies. Sales are primarily driven by corporate divestitures, succession planning and targeted growth. Companies in a “special situation” in particular are showing an increased willingness to sell.
Transaction aborts on the rise
Around 40% of respondents stated that they had canceled a transaction in the first quarter of 2025. The main reasons are diverging purchase price expectations, followed by due diligence findings and unexpected slumps in operating business.
Outlook for Q2 2025
Despite the still subdued overall climate, the rising valuation forecasts and the clear growth motives of companies give hope for a somewhat more stable second quarter. “The German M&A market continues to face challenges, particularly in the large-cap segment. At the same time, we are seeing the first positive developments in the smaller market segments. Companies are increasingly focusing on strategic growth, which speaks for exciting transactions in the coming months “, comments Jan Pörschmann, Chairman of the BM&A.
You can find the complete evaluation here: Study results – Climate Monitor Q1 2025
