Gold: 2025 was defined by geopolitical conflict, shifting trade policy and market volatility. How did these forces affect deal flow and valuations on the global stage?

G.T.: The global landscape in 2025 has undoubtedly been complex. We have observed that uncertainty is the greatest challenge to deal-making. Geopolitical instability and shifting trade policies led many investors to adopt a ‘wait-and-see’ approach, thereby widening the valuation gap. Sellers held onto historical valuations, while buyers priced in future risks, resulting in longer negotiation timelines and more rigorous due diligence.

However, capital remains unutilised. The shift we witnessed was a flight to quality. Investors moved away from speculative growth assets toward businesses with resilient cash flows and robust financial positions. We also observed that heightened regulatory scrutiny, particularly regarding sanctions and supply chain security, made cross-border transactions more complex. In this environment, the ability to understand risk in depth and conduct more thorough due diligence became the decisive factor in closing deals.

Gold: Did Cyprus largely track global M&A trends in 2025, or did local conditions, such as regulation and market depth, drive a different outcome?

G.T.: Cyprus demonstrated remarkable resilience and avoided the broader global slowdown in specific areas. While global volumes softened, the Cypriot market experienced significant activity, driven by a local necessity for consolidation rather than just opportunistic buying.

We observed significant developments in the banking and retail sectors, driven by a strategic imperative to achieve economies of scale and enhance digital capabilities. Furthermore, Cyprus’s robust regulatory framework and tax incentives for high-skilled talent continued to position the island as a stability hub within a volatile region. Rather than merely tracking global hesitation, local market depth and the maturity of our professional services sector allowed deals to progress, particularly where succession planning in family-owned businesses required structural change.

Gold: Which sectors and/or segments in Cyprus emerged as the most active or attractive for transactions, and which, if any, look most promising going forward?

G.T.: The financial services sector was undoubtedly the headline act of 2025, characterised by landmark consolidation in banking and insurance. This reshaping of the financial landscape has created stronger, more capital-efficient institutions. We also witnessed a significant transformation in the retail sector, in which mergers enabled major players to optimise their supply chains and digital infrastructure.

Looking forward, the renewable energy sector holds immense promise. As Europe shifts away from reliance on traditional energy sources, Cyprus’s potential for solar and other renewable energy is attracting international capital. Additionally, the healthcare sector needs further consolidation, driven by private equity interest in improving service quality and operational efficiency. Finally, technology remains a constant driver; we expect continued investment in local fintech and software ventures that serve global markets.

Gold: In today’s environment, when does M&A make strategic sense for Cypriot businesses and what benefits does it offer?

G.T.: M&A makes strategic sense when it accelerates transformation. In today’s fast-paced environment, organic growth can sometimes be too slow to keep pace with market disruption. For Cypriot businesses, M&A offers a pathway to instantly acquire talent, technology, or market share that would take years to build from scratch.

The primary benefit we see is resilience. By combining resources, businesses can achieve the scale necessary to invest in digital transformation and navigate regulatory complexities more effectively. It also offers a solution to the talent shortage; acquiring a team is often more efficient than recruiting one. Ultimately, M&A should empower businesses to take charge of change, rather than being reactive to it.

Gold: Do you expect 2026 to resemble the dynamics of 2025, or is the market entering a different phase? And what will be the key drivers of that shift?

G.T.: We believe the market is entering a phase of maturity and compliance-led growth. While 2025 was about consolidation, 2026 will likely focus on integration and optimisation. The impending introduction of stricter Foreign Direct Investment (FDI) screening mechanisms across the EU, including Cyprus, will formalise the approach to cross-border capital. 

The key driver will be ESG (Environmental, Social, and Governance). It is moving from a compliance tick-box to a core valuation metric. Companies with strong ESG credentials will command premiums, while those without will face discounts. Furthermore, we expect AI and digital maturity to become non-negotiable aspects of deal rationale. Investors will look for targets that are future-ready. Consequently, 2026 will favour businesses that are transparent, sustainable, and digitally advanced.