The European mergers and acquisitions (M&A) market remained strong in 2024 despite ongoing political and economic challenges.
This is evident from the latest annual European M&A Study by international law firm CMS. The study provides insights into 582 transactions in which CMS was involved in 2024.
The research highlights a shift towards a buyer-friendly deal structure, with an increased use of purchase price adjustments (PPAs) and earn-outs, balanced by a rise in W&I insurance—which is typically considered a seller-friendly trend.
4 Legal trends in acquisitions
The main findings of the CMS European M&A Study are:
1. Pricing & structuring: buyers focus on value protection
Purchase price adjustments (PPAs) increased, indicating buyers' drive for financial security amid market fluctuations. Earn-outs became more popular, particularly in politically sensitive sectors such as energy and technology, where regulatory uncertainty is a major concern.
2. Risk allocation: buyers demand more protection
Material Adverse Change (MAC) clauses are being used more frequently, especially in transactions exposed to political shifts or regulatory interventions. Buyers have also negotiated longer claim periods for warranty breaches.
3. W&I Insurance: a key tool in the buyer-friendly market
The use of W&I insurance rose by eight percent, driven by lower premiums and greater adoption in mid-sized and large transactions. The United Kingdom led this trend, where insurance played a crucial role in risk mitigation strategies.
4. ESG & AI: theory vs. reality in M&A
ESG and AI have been among the most discussed topics in the legal sector in recent years. However, despite significant media and industry attention, CMS data shows that ESG aspects and AI tools have not yet become a fundamental part of M&A transactions.
Confidence in a developing market
2025 will bring new opportunities for strategic investors, thanks to a more stable M&A pipeline and improvements in debt markets. However, buyers must remain agile, balancing market optimism with increased due diligence and regulatory awareness.
"M&A is not just about transactions – it’s about strategy", says Louise Wallace, Head of the CMS Corporate/M&A Group. "Our latest Study captures the key trends shaping 2025 and provides clients with the insights they need to navigate complexity with confidence."
Roman Tarlavski, Partner Corporate/M&A at CMS Amsterdam, adds: "Despite improvements in business confidence and key fundamentals, market conditions remain challenging, and recent geopolitical developments temper M&A sentiment. These circumstances create opportunities for companies that can overcome challenges, especially in resilient sectors such as technology, industry, and healthcare. Our study is a tool to help them succeed."
Read the full CMS European M&A Study 2025 here.
