The Baltic M&A market recorded a total of 231 deals worth €2.1bn in 2024, a significant increase on the previous year, according to a new report published by law firm Ellex in association with Mergermarket.

M&A overview

In volume terms, the 231 transactions recorded by Mergermarket represents a 42% uplift from 2023. Over half (58%) of all deals announced in the Baltics in 2024 were led by domestic bidders, who also accounted for 51% of aggregate deal value – indicative of the growth of strong regional investors over recent years, both corporates and funds. Indeed, the last time that inbound deals outpaced domestic M&A in volume terms was 2018.

Paulius Gruodis, M&A Partner at Ellex in Lithuania, commented: “The rise in domestic dealmaking reflects the increasing financial strength of Baltic companies, as well as growing local private equity activity. While international investors have been more cautious due to global geopolitical uncertainties, strong local players have seized opportunities to expand regionally and strengthen their positions across the Baltics.”

Deal value in the region soared by 76% year-on-year, from €1.2bn to €2.1bn. This surge was fuelled by an increase in big-ticket deals – there were seven transactions valued at €100m or more, versus just three deals of the same size the year prior. Indeed, the region’s largest deal of the year alone was worth almost as much as the 10 largest transactions announced in 2023 combined. This transaction, valued at €670m, saw Estonian investment holding company Infortar acquire 21.71% of all shares in Tallink Grupp from Citigroup Venture Capital, bringing its stake in the Estonian shipping company up to 68.47%.

Overall, Lithuania, the largest economy and most populous country in the Baltics, led the way in deal volume terms, generating 41% of the transactions announced in the Baltics in 2024. Estonia contributed 34% of regional M&A deal volume, with Latvia accounting for the remaining 25%.

“Lithuania’s record-breaking year can be attributed to its strong economic growth and competitive business environment,” said Ramūnas Petravičius, Partner & Co-head of Corporate and M&A practice at Ellex in Lithuania. “The Lithuanian government offers a highly favourable business climate, ranking among the top EU countries for ease of doing business. Low corporate taxes, efficient regulations and incentives for foreign investment make it attractive for businesses and investors.”

Sector focus

In terms of sectors, technology, media & telecoms (TMT) has, for several years, been the leading light in Baltic M&A. In 2023/24, the TMT sector accounted for 21% of transaction volume and 30% of all publicly declared deal value in the Baltics. These remain the largest shares across all sectors.

Sarmis Spilbergs, M&A Partner and Head of the Technology, Media and Communications practice at Ellex in Latvia, cited a boom in green tech as one factor behind this trend. “We worked on several solar projects throughout 2024,” he said. “There are a lot of developers putting up mid-sized plants and then selling them to Scandinavian investors who are hungry for green tech. They sell quickly, and there are plenty still being built.”

Baltic TMT companies are likely to remain a point of emphasis for domestic and international investors. According to Mergermarket’s intelligence tool, of the 22 ‘companies for sale’ stories the platform is tracking in the region, four (18%) relate to TMT assets, a high point that the industry shares this year with the Baltic transportation space. Overall, the spread of sectors in the Mergermarket heat chart speaks to the Baltics’ economic diversification and bright near-term prospects.

Outlook

“Everything seems to be lining up for a very good transaction year,” said Risto Vahimets, Partner and Head of Transactions at Ellex in Estonia. “Private equity cash has been stashed away, interest rates are coming down and the Baltic markets are stabilising.”

Whatever happens elsewhere in the world, the Baltics can surely rely on their reputation for resilience, history of innovation and openness to investment to drive M&A activity in 2025.

The report is also available at ellex.legal.