Chain reaction: How supply chain considerations and sustainability are shaping M&A in Europe, in association with RSM Italy, reveals European dealmakers’ attitudes to the current M&A environment, the growing stringency in sustainable legislation and its effect on global supply chains.

Highlights include:

• M&A expectations. Two thirds of respondents (67%) are planning to undertake between one and three M&A transactions over the next 12 months, up from 63% who completed this number of deals over the past year. Germany is tipped to see the most growth in M&A activity, with 28% of respondents highlighting it as the key deal market, while the Iberian nations (Spain and Portugal) come in second with 25% of respondents.
• CSDDD under the spotlight. The forthcoming CSDDD is set to make European companies more attractive acquisition targets, according to 92% of respondents with German executives being particularly optimistic. B Corp certification is also considered by 83% of respondents (93% in Germany) as increasing the appeal of prospective deal targets.
• Supply chain due diligence to rise. Nearly half of respondents (47%) have always conducted due diligence on a target company’s global supply chains as part of the dealmaking process in the past two years. This is set to rise to 68% who expect to always undertake this over the next two years. German respondents are ahead of the curve, with 60% having always done this over the past two years, growing to 73% who expect to always do this over the next two years.
• AI adoption in sustainability due diligence. More than half of respondents (55%) anticipate using AI tools for sustainability due diligence over the next two years for some or all deals they pursue, a significant increase from the 32% who have used AI for this purpose to date. German respondents are leading the charge, with 60% having already used AI and 66% expecting to do so over the next two years.
• Ask the experts. Investors are placing more emphasis on external specialists to understand supply chain risks. While 63% of respondents have used such specialists already, an overwhelming 91% plan to use them to conduct due diligence on the supply chains of target companies with respect to sustainability matters over the next two years.