European M&A multiples returned to their historical averages in 3Q25, shaking off a second-quarter slump following the announcement of far-reaching US tariffs in April.

Median EBITDA multiples slipped to 7.9x in the second quarter, well below their five-year quarterly average of 11.6x, according to Mergermarket data*.

A subsequent rebound in the third quarter to 11.9x is more in line with multiples over the past five years, with a range of capital markets and M&A indicators pointing to a similar outcome in the fourth quarter, according to analysis by Mergermarket.

Strong performance by European stock markets is likely to be a factor when explaining the recent rebound in multiples, according to Nigel Wellings, partner and co-head of corporate for Europe at Clifford Chance.

The Stoxx 600 index is up 15% year-to-date (YTD) on a total return basis through yesterday’s close (17 November), and is trading close to all-time highs despite some modest selling pressure in recent days.

Other factors driving up multiples include robust activity in high-multiple sectors such as tech, Wellings said.

Notable tech deals in recent months include KKR’s splashy GBP 4.2bn (EUR 4.8bn) enterprise value take-private of London-listed instrumentation and controls provider, Spectris.

The deal, which was announced in July, was struck at 20x Spectris’s 2024 EBITDA.

A European artificial intelligence (AI) deal has also recently entered the mix.

Nasdaq-listed Rumble tabled an initial all-share offer in August for Frankfurt-listed cryptocurrency miner and data-centre provider, Northern Data.

Following an offer revision earlier this month, its bid values the target at around EUR 2bn, including debt, and a multiple of 29x EBITDA.

Bidders are also making use of falling costs of capital to support higher offers, Wellings said.

Spreads on European high-yield debt, typically used to fund buyout transactions, have narrowed since April’s tariff-related blowout.

The ICE BofA Euro High Yield Index Option-Adjusted Spread was 283 basis points (bps) on 14 November, near the bottom of its five-year range of 260bps-660bps.

A series of European Central Bank rate cuts since 2024, along with narrowing spreads, have helped reduce effective yields on sub-investment-grade debt to around 5%, their lowest levels since mid-2022.

Despite some punchy tech deal multiples and an almost-consensus view the stock market is in an AI-bubble, European M&A valuations are well within their historical range.

EBITDA and revenue multiples on M&A transactions in Europe are sensitive to the overall level of deal flow, with almost 50% of the variance in valuations since 2020 explained by changes in deal volume, according to Dealspeak analysis.

The most obvious example came in 2Q25, when deal flow cooled slightly and volatility spiked, as the US introduced tariffs on key trading partners (see chart above).

There was also evidence of a dip in multiples in 4Q24, around the time of elevated market volatility during the US presidential election period.

Another low point in multiples occurred in 1Q23, coinciding with a mini-banking crisis which resulted in the collapse of US-based Silicon Valley Bank and Switzerland’s Credit Suisse.

Dips like these are most likely explained by a widening of the bid-ask spread in auction processes during periods of volatility.

However, a strong third quarter for European M&A in 2025, followed by a solid start to the final three months of the year, has helped multiples rebound.

European deal volume was EUR 134bn in October, Europe’s highest monthly tally since December 2021.

YTD deal volume in Europe through the end of October was EUR 737bn, 21% higher than the same period in 2024, according to Mergermarket data.

More generally, investors consider the medium-term outlook to be more positive, Wellings said, adding that although there are still headwinds, the perception has changed.

“That alone ought to push up multiples,” Wellings added.

Stage set for busy 4Q

These trends bode well for ongoing auction processes, with Mergermarket’s Auctions Pipeline brimming with opportunities from the lower mid-market to large-cap arena in Europe.

One of the larger deals currently being tracked is Italy-based collectibles producer Panini, which has appointed Citi to explore a sale that could value the company at between EUR 2.5bn and EUR 3bn, including debt, this news service reported last month.

Panini’s potential valuation is based on a normalised forward-looking EBITDA multiple of 10x-11x.

In France, bidders have tabled non-binding offers (NBOs) for the fuel-testing division of Paris-listed Bureau Veritas at valuations around 7x-8x 2025 EBITDA, this news service reported last week.

The unit is expected to deliver EBITDA of around EUR 74m this year, according to the report, implying a potential deal value of EUR 518m-EUR 592m, including debt.

In addition, financial sponsor Adiuva Capital took the unusual step of setting a floor valuation of 10x EBITDA ahead of NBOs for its portfolio company, NTA Systemhaus, in October.

The Germany-based fire protection, security and communications firm is being marketed off forward-looking 2025 adjusted EBITDA of EUR 17m.

With dealmaking activity strong and valuations expanding, the stage is set for a busy finish to the year for European M&A.

*Mergermarket’s deals database tracks full-year (FY) or last 12 months (LTM) EBITDA when calculating median multiples. Multiples above 100x and below 1x were removed from this analysis as not meaningful. Only deals involving the purchase of a stake above 30% of the target company for which a disclosed multiple was available have been included.