• 768 deals completed in 2025, led by middle-market businesses.
  • Engineering and Manufacturing emerges as strongest sector, overtaking telecommunications, media and technology.
  • Market momentum proves testament to investors and businesses operating across diverse European economies.

After advising on a record 768 completed transactions across Europe in 2025, RSM shares its latest European analysis in its latest M&A trends report. 

Heading into 2025, dealmaking looked set to be conducted against a complex backdrop of macroeconomic volatility, geopolitical uncertainty and evolving financing conditions. 

As the year progressed, M&A activity thrived. Private equity and other investors deploying capital selectively, focusing on sectors with clear growth drivers and resilient mid-market business models.

RSM’s market outlook offers insight on the forces that shaped dealmaking across different sectors, and how these are expected to influence the market as it moves through 2026.

Key insights include:

  • Engineering and manufacturing emerged as the most active sector in 2025, with RSM advising on 156 completed deals, overtaking technology, media and telecommunications, which recorded 146 deals after leading the market in 2024.
  • Business services also saw strong M&A activity, with 152 completed deals, as investors continued to back essential service providers in areas such as professional services, testing, audit and compliance, where recurring demand and consolidation opportunities remain attractive.
  • In the middle-market, valuation expectations have adjusted more quickly to higher interest rates, narrowing buyer–seller gaps, while supportive private debt financing continues to underpin deal activity.
  • Private equity’s continued role in the market reflects strong capital availability, with deployment increasingly concentrated in the middle-market, resilient cash-flow businesses and value creation through buy-and-build strategies, rather than large, highly leveraged transformational deals.

Lee Castledine, Partner at RSM in the UK and Chair of RSM's Global Financial Due Diligence Leadership Team, said: “Middle-market businesses are the unsung heroes of European M&A, thriving with agility and resilience even in the toughest markets,

“In 2025, we saw this play out most notably in sectors such as engineering and manufacturing, where long-term demand and fragmented markets were well suited to structured, mid-market investment strategies.

“As the market moves through 2026, we expect businesses to continue taking a measured and selective approach to M&A, focusing on sectors where growth prospects are most clearly defined. Private equity is likely to remain a central driver of deal activity, supported by disciplined investment approaches and a focus on opportunities with a clear strategic or geographic rationale.”

Read more about our European M&A deals, and download our recent Industry trends and growth drivers report.