Macro-economic unpredictability tends to be bad for big-beast hunting, but one class of megadeal can still yield impressive trophies for European dealmakers: large joint ventures (JVs).

“In uncertain times, the question with larger deals is whether the strategic rationale is significant enough to mitigate the valuation risks,” according to Nigel Wellings, London-based partner at Clifford Chance and co-head of the firm’s corporate practice for Europe.

“Joint ventures can be an exception given that both sides tend to use similar valuation methodologies,” Wellings also said.

Volatility in global markets has spiked in the last fortnight after US President Donald Trump announced a tougher-than-expected trade war on 2 April; and then paused the plan on 9 April, while still leaving many new tariffs in place.

“The rationale for big deals will remain, but dealmakers will have to think hard about whether to execute now or to wait,” Clifford Chance’s Wellings said.

JVs might appear less exciting than public takeovers or mergers of equals, but the largest ones can still be impressive. One of the most significant JVs in recent years was the agreement to combine Siemens’ mobility business, including the German company’s rail-traction business, with Alstom, the French rolling-stock manufacturer.

The deal, which would have created a new entity with revenues of EUR 15.3bn, was agreed in September 2017 but blocked on competition grounds in February 2019.

There have been 68 European megadeals – defined as those with a ticket size above EUR 10bn – over the last decade, according to Mergermarket data. The dataset excludes lapsed deals, including Siemens’ attempt to create a JV with Alstom.

One of the latest megadeals is UniCredit’s public takeover of Banco BPM, which was announced on 25 November 2024. The deal was worth EUR 10bn at the time of the announcement.

Strategics dominate megadeals

The list of European megadeals over the last decade is dominated by strategic deals, often structured as mergers of equals. The largest deal on the list is the takeover of Anglo-South African brewer SABMiller by AB InBev for USD 119bn, which was announced in September 2015 and closed in October 2016.

The deal to create the world’s largest brewer was so big that it was almost 1.8x the size of the second deal on the list: the takeover of UK-founded and Jersey-registered biopharmaceutical company Shire by Takeda of Japan. The Asian bidder made an approach in April 2018 and closed the deal in January 2019.

Valuations can get punchy in the megadeals space. SABMiller was valued at 23.2x in terms of enterprise value (EV)/EBITDA, while Shire was valued at a more modest 12.67x.

“Larger strategic deals are often looking to consolidate a market while seeking economies of scale; potentially also allied with providing an entry point to a new market, whether that is a geography or a vertical; or possibly to achieve a strategic shift for a business,” Wellings said.

Multiples often reflect the growth opportunity of the deal, which means that they can vary a great deal across sectors. “Multiples that are higher than the market norm often reflect a key opportunity to enter an emergent market, such as artificial intelligence, at a critical time,” Wellings noted.

Top 10 European megadeals, 2015-24

Source: Mergermarket, data correct as at 08-Apr-25

Two-step approach

Despite macro headwinds, Mergermarket intelligence highlights a number of potential opportunities for dealmakers seeking megadeal trophies, particularly among JVs.

European defence is in focus as military budgets soar in response to Trump’s isolationism. Megadeals could make sense as a way of creating European champions.

German defence company Rheinmetall, which has a market capitalisation of nearly EUR 61bn, is keen on continuing to build JVs, as reported in January. Although not a megadeal, it created a JV with Leonardo to build battle tanks and infantry fighting vehicles for the Italian army last year, pointing the way to fertile ground for more deals.

The European auto industry is in the eye of the storm during the current trade war. JVs can make sense in the industry as a way of splitting the bill for the investments needed to transform businesses.

Finally, potential deals that would make strategic sense were it not for market volatility can still be coaxed into existence with a little patience.

“One way of mitigating valuation challenges is to structure deals with a two-step process, perhaps acquiring an interest now, but with a control transaction at a later date,” Wellings said.

European megadeals might be more difficult in the midst of a global trade war, but the most imaginative dealmakers will still be able to find a way to the finishing line.