The next chapter: Central and Eastern Europe attract a record €42.5bn in investments

Record-Breaking M&A Investment in Central and Eastern Europe

In 2025, Central and Eastern Europe saw an unprecedented €42.5 billion invested in mergers and acquisitions, according to a recent study by Forvis Mazars and Mergermarket. Although the total number of deals dropped by 9% to approximately 1,300, the surge in deal value—up 36% from the previous year—reflects a shift toward fewer but larger transactions, signaling renewed optimism in the region’s economic outlook.

The most notable deal was the €4.1 billion purchase of Czech pharmaceutical company Zentiva by US-based GTCR, marking the largest foreign investment in the area in recent years.

Analysts attribute the reduction in deal volume to external challenges, particularly Germany’s economic slowdown, which has led investors and companies to be more selective in their acquisitions throughout the region.

Andrija Garofulić, CEE co-lead and financial advisory partner at Forvis Mazars, commented, “The downturn in Germany’s economy caused many investors to hesitate, and this cautious approach extended into central and northern CEE.”

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CEE: A Strategic Entry Point to Europe

The report highlights that international investors continue to play a pivotal role in the CEE M&A landscape, typically responsible for over 40% of deal numbers and up to 75% of total deal value. In 2025, foreign buyers accounted for 43% of transactions and 54% of deal value in the region—significantly higher than North America, where international investors represent less than 20% of the market.

While the US, UK, Germany, and France remain leading sources of foreign investment, the report notes a growing trend of intra-regional investment as well.

Central and Eastern Europe’s appeal lies in its robust economic growth, EU membership, regulatory reliability, skilled labor force, and lower operational costs compared to Western Europe. Its geographic position, close to the EU’s 500 million consumers, combined with advanced transport links and increasing digitalization, makes the region highly attractive to global businesses.

As a result, CEE continues to serve as a vital gateway for international capital entering Europe.

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Garofulić explains, “Proximity to major markets, a talented workforce, and lower costs make CEE an ideal location for production and industrial ownership. It’s a logical choice for companies wanting to be near their customers.”

Regional Integration Boosts Investment Climate

Further integration within the region is providing additional momentum. Albania is progressing toward EU membership, while Romania and Bulgaria have joined the Schengen zone, enhancing investment security and predictability.

The region’s largest deal was Erste Group’s €6.8 billion acquisition of a stake in Santander Bank Polska. - Alastair Grant

Key Sectors: Technology, Healthcare, and Finance Lead the Way

Technology led the pack in 2025, with 20 deals recorded in the sector. The most sought-after targets included software developers, IT service providers, and companies specializing in fintech and digital infrastructure.

However, financial services dominated in terms of deal value, reaching a total of €11.7 billion. The standout transaction was Erste Group’s acquisition of a 49% stake in Santander Bank Polska for €6.8 billion.

Top Destinations for M&A Activity

• Austria: Maintains its role as a bridge between Western and Eastern Europe.
• Czech Republic: Attracts investors with its established industrial sector.
• Romania: Gains attention thanks to rapid economic growth.
• Lithuania: Recognized for its thriving technology and fintech industries.
• Poland: Remains the region’s largest and most attractive market.

Poland’s rise has been especially noteworthy. In 2025, it became the first CEE nation to surpass $1 trillion in combined GDP, paving the way for potential G20 membership. Adam Zohry, co-head of the CEE region at Forvis Mazars in Poland, remarked, “This achievement sends a powerful message and elevates Poland’s profile on the global stage.”

Private Equity Shows Signs of Recovery

After a challenging period from 2022 to 2024, private equity funds are beginning to rebound. During those years, difficulties in exiting investments hampered fundraising efforts, as firms lacked recent success stories to attract new capital. Garofulić noted, “Without successful exits, private equity firms struggled to demonstrate their track record, making it tough to raise new funds.”

Outlook: Cautious Optimism Ahead

The report’s authors express a measured optimism for the future, citing increased public expenditure, inflows of EU funding, and a strengthening economy as positive indicators. Garofulić emphasized, “With robust public spending, significant EU funds, and a healthy economy, market sentiment is upbeat—crucial for ensuring capital availability.”