Global trade uncertainties stemmed the flow of acquirors announcing megadeals in Europe, the Middle East and Africa (EMEA) in 1H25, but there are signs that the tide could be turning.

As a result of trade tariff uncertainty, there were just two megadeals, transactions with a value above EUR 10bn, announced in EMEA in the first half of 2025, according to Mergermarket data. This is the joint lowest level of announced megadeals in a six-month period since the beginning of the COVID-19 pandemic in 2020, tied with 1H23.

“The larger the deals, the harder it is to assess valuations, and the uncertainty toggles need to be much higher,” according to EY-Parthenon Global Deputy Leader, Nadine Mirchandani.

On average, there have been four megadeals announced every half year in EMEA since the beginning of 2020. When deals lapse, they are removed from the dataset.

The high watermark in this period came in 2H21 with eight EUR 10bn plus acquisitions announced and completed, with dealmakers taking advantage of a sweet spot of accommodative momentary policy and COVID-19 vaccines before the inflationary crisis that followed Russia’s invasion of Ukraine in early 2022.

The two EMEA announcements this year came before US President Donald Trump startled markets with tougher-than-expected tariffs on “Liberation Day” in April.

The deals announced were the merger of petrochemicals company Borouge with plastics specialist Borealis, announced in March; and Banca Monte dei Paschi di Siena’s (BPMS) unsolicited bid for larger peer Mediobanca in Italy, announced in January. Given the speculative nature of BMPS’ bid for Mediobanca in particular, the deal count for 1H might drop again.

Although there has been a lull in big-ticket M&A announcements as the market digested a new trade paradigm, there are signs that the mood could change in 2H25.

“Since a pause in April, we have seen European executives getting more comfortable with risk premiums, with a greater understanding of the levers needed to manage uncertainties,” Mirchandani said.

Resilient mid-market

At 6,813, announced deal counts were the lowest since 2H15. However, the resilience of the middle market meant 1H25 clocked in at around 82% of the average deal count of 8,323 registered between 1H20 and 1H25.

At the same time, aggregate deal volumes actually beat the score for 2H24 with EUR 410.7bn announced, compared to EUR 396.6bn.

“Europe’s mid-market has continued to act as an engine for deal counts throughout global trade uncertainties, even though mega-deals have been somewhat lacking,” Mirchandani said.

Banks in focus

It is significant that one of the two megadeals that was announced in 1H25 was a hostile bid for a European bank.

There are two unsolicited bids for European banks that are drawing closer to the finishing line. One is BPER’s EUR 4.3bn equity-value bid for Banca Popolare di Sondrio (BPS); and the other is BBVA’s hostile bid for Banco Sabadell, which valued the target’s equity at EUR 11.1bn at deal announcement in 2024.

If one of these two deals is successful, it could open the floodgates for a long-awaited cross-border consolidation of Europe’s banking scene, as flagged by Dealspeak EMEA in mid-June.

“We expect to see further consolidation in European financial services, and also activity in life sciences,” Mirchandi said. Another hot area involves data centres, with the energy sector being adjacent to this trend.

Another source of further activity in 2H25, and possible megadeals, could involve carveouts, Mirchandani said. “There is a trend in the US for large corporates to look at splits and spins to unlock value, and we expect European companies to follow the example too.”

Should geopolitics calm, there could be a smoother environment for EMEA megadeals.