After years of slowdown, Belgium’s M&A scene is heating up again – with competitive auctions, large deals, and cross-border investors returning in force. But this isn’t just a rebound; it’s a reshaped market where Warranty & Indemnity (W&I) insurance, once rare, is now a must-have tool for getting deals done in Belgium. Here's what it means for buyers, sellers, and investors navigating today’s complex landscape.
After two years of facing strong headwinds, European and Belgian M&A markets are showing signs of recovery. Last year, deal volumes strengthened across Europe, with a 23 percent increase in deal count and a 43 percent rise in M&A insurance policy count, according to the latest data from specialist insurance broker Howden M&A. Competitive auctions have returned, large transactions bounced back from their decline in 2023, and even previously dormant sectors like real estate are reviving.
However, this recovery is not simply a return to pre-2022 norms. The landscape has shifted significantly: economic volatility, geopolitical and trade tensions, and stricter regulations have introduced a new level of uncertainty in dealmaking.
In response, investors are adapting their strategies, with Warranty & Indemnity (W&I) insurance playing a central role in this transformation. W&I insurance is now estimated to be used in 75 percent of major Belgian transactions, a stark contrast to its near-zero adoption just five years ago.
Gauthier Drion (right on the picture), Executive Director at Howden M&A, pinpoints the turning point: “While W&I insurance has been a common tool in M&A transactions in all jurisdictions north of Belgium (including the Netherlands) for the past decade, the Belgian market was clearly lagging behind. However, over the past five years, we’ve seen exponential growth in the use of the product in Belgium, primarily because it has become a key component of many foreign investors’ playbooks, which has subsequently influenced Belgian M&A practices.”
According to Raphaël Delsaux (left on the picture), Director at Howden M&A, “Belgian dealmakers, whether on the buy-side or sell-side, are now considering the use of this insurance solution in most M&A transactions, as they realise it creates a win-win situation between parties and facilitates the deal-making process. On the one hand, sellers can limit their liability and achieve a clean exit without having to set up escrows or other securities (allowing them to receive 100 percent of the sale proceeds at closing), while buyers can secure much broader protection from insurers, backed by a swift and transparent claims process, without having to seek recourse from sellers.”
From caution to competition
Belgium’s M&A market followed global trends over recent years, peaking between 2020 and 2021 before experiencing a sharp slowdown due to rising interest rates and geopolitical instability through 2022–23. “In the last two years”, says Raphaël Delsaux, “we experienced what everyone experienced – an overall slowdown in M&A activity. Sponsor-backed activity was muted, with a number of prospective sellers inclined to hold off from running processes for their higher value assets, knowing the difficulties in obtaining debt or organising true auctions might lead to sub-optimal valuations”.
However, signs indicate strong acceleration once again, with multiple bidders returning to auction processes rather than sluggish bilateral negotiations dragging out over months. “Since June last year (2024), we’ve seen clear signs of an uptick across all sectors – deal volume is increasing steadily month on month. The recent developments in the markets, namely the beginning of what appears to be a full-blown tariff war, and the risks they pose to global growth should, however, call for caution. The situation is evolving rapidly and must be closely monitored to assess its impact on M&A activity in Europe and Belgium. For now, we have not yet seen any consequences on the transactions we are working on, but it is not excluded that dealmakers may delay, suspend or reconsider their projects in the coming weeks.”
This restored competition isn’t confined only to local players either; cross-border acquisitions are playing an increasingly central role, with new capital flows emerging from regions that previously had fewer active buyers within the Belgian market.
Cross-border capital flows are shifting deal dynamics
One of the most striking trends reshaping Benelux M&A is the shift in foreign investment patterns. While US-based investors were once dominant players in Belgian acquisitions, their presence has waned slightly over the past few years. In their place, Middle Eastern sovereign funds and Asia-Pacific investors have stepped up their activity, seeing Belgium as an attractive entry point into Europe’s single market. These buyers not only bring capital, but new expectations for deal structuring – particularly around risk mitigation strategies like W&I insurance.
For these international investors, M&A insurance solutions offer stability in unfamiliar jurisdictions where regulatory nuances can be difficult to navigate. Gauthier Drion explains that many foreign buyers now insist on insuring deals as standard practice to avoid potential post-closing disputes: "Buyers coming into Belgium today expect familiar structures – including insured warranties – as part and parcel rather than optional extras."
This influx of cross-border capital has also contributed to sector-specific growth in areas where Belgium holds strategic advantages. For instance, data centre investments have surged due to increasing demand for cloud infrastructure and AI-driven computing power across Europe. Healthcare and biotech remain pillars of Belgian M&A activity, with pharmaceutical firms seeking acquisitions that provide access to cutting-edge research and development capabilities. Even real estate (one of the sectors hardest hit by economic uncertainty over the last two years) is showing signs of renewed investor confidence as large institutional players return to the market.
With more high-value deals moving forward across multiple industries, competition among bidders is intensifying once again. Auctions are becoming genuinely competitive rather than defaulting into bilateral negotiations. M&A processes are also running much faster than in the previous two years, and more bidders are trying to pre-empt again. Finally, large transactions are returning to market. This is a clear sign that investor sentiment is recovering across Belgium.
Why W&I Insurance became critical amidst changing regulations
The resurgence in M&A activity does not come without challenges. One major factor influencing deal structures today is the increased regulatory complexity at both local and European levels. For instance, Foreign Direct Investment (FDI) reviews have become stricter across multiple jurisdictions within Europe, adding layers of complexity for international buyers acquiring assets in sensitive industries such as technology or energy infrastructure.
Raphaël Delsaux notes that these evolving regulations create greater uncertainty around transactions: "When M&A becomes riskier, the value of M&A insurance rises. The breadth of risks surrounding more complex assets clearly incentivizes buyers and sellers to benefit from the use of M&A insurance to unlock negotiations."
Delsaux also highlights how M&A insurers’ appetite for complex risks has evolved alongside these changes. "Two or three years ago, certain industries would struggle to get policies placed", he explains. "Today, even highly regulated sectors such as healthcare or financial services see broad appetite among specialist underwriters, and we’ve placed policies on landmark Belgian transactions in these sectors."
Gauthier Drion adds "even high-risk regions such as South America or Africa are now becoming perfectly insurable."
In addition to regulatory pressures, another factor accelerating W&I adoption has been increased competition among insurers themselves. According to Gauthier Drion: “pricing rates, coverage and placement processes have improved significantly in the past couple years due to new market entry by W&I insurers in a period of lower M&A volume.”
In conclusion: all of these developments have made W&I insurance more accessible than ever in Belgium, making it an unavoidable part of today’s deal-making toolkit.
What comes next? The future of W&I insurance in Belgium
With W&I insurance now embedded in the Belgian M&A landscape, its role is evolving from a transaction safeguard to a strategic enabler. As deal complexity increases, insurers are expanding their offerings beyond traditional representations and warranties to cover risks once deemed uninsurable.
One major development is the widening use case for tax and contingent risk policies, which are designed to cover identified issues. According to Raphaël Delsaux: “Many of our Benelux clients, particularly private equity funds, are now using these policies both for M&A transactions and outside of the M&A context. Our tax and contingent risks team has been able to structure a variety of novel solutions to help our clients address known risks and unlock capital by avoiding the need for provisions in the accounts or other types of holdbacks.”
Another notable evolution concerns the growing use of synthetic W&I insurance, which allows buyers to secure warranty coverage even when sellers are unable or refuse to provide warranties under the sale agreement – a common scenario in distressed asset sales or private equity exits where sellers want a clean break with no lingering liabilities post-closing to allow for a faster liquidation. By shifting risk entirely onto insurers, synthetic policies can completely remove one of the biggest negotiation barriers in certain high-stakes transactions.
At the same time, private equity firms are turning to end-of-fund-life policies to de-risk investment funds at the end of their lifecycle and maximise returns to investors. According to Raphaël Delsaux, "the market has now matured to offer meaningful insurance solutions that facilitate the transfer of tail risks resulting from legacy activities to the insurance market, protecting the funds and their managers or liquidators as they liquidate and upstream capital to investors."
Another key area of development is how insurers assess risk using AI-driven analytics and claims data modelling. With access to years of historical claims data from insured transactions worldwide, providers are refining pricing and coverage models based on real-world outcomes rather than theoretical projections." At Howden M&A, we’re leveraging years of policy negotiations and claims history across multiple jurisdictions", Gauthier Drion explains. "That allows us not only to improve coverage but also help clients structure deals more effectively before issues arise."
The next phase for W&I Insurance
As W&I insurance becomes standard practice in Belgian M&A, its role will extend beyond mitigating transactional risk. It will increasingly shape the most early stages of deal structuring and negotiation. Dealmakers who integrate insured structures early in negotiations will gain an edge over competitors still relying solely on conventional indemnification methods that introduce friction into negotiations.
A key shift already underway is the use of insurance as an execution advantage rather than just a fallback measure against unforeseen risks post-closing. Sellers favour insured structures because they enable faster exits without holding back capital in escrow accounts for potential future claims, making these deals inherently more attractive compared to uninsured alternatives. Buyers, on the other hand, can obtain enhanced protection and rely on a commercial and efficient claims process to secure their investments, without having to engage in difficult discussions with parties that may have become their new business partners.
As firms recalibrate their approaches heading deeper into 2025–26 with record levels of dry powder waiting deployment worldwide, and with regulatory frameworks tightening across Europe and global markets facing continued economic uncertainty (even as M&A activity rebounds), the ability to proactively manage transaction risks through well-structured solutions like W&I or specific risk insurance will separate high-performing investors from those struggling with execution delays or unexpected liabilities.
These M&A insurance solutions won’t just be tools used occasionally; they’ll become defining features shaping modern corporate finance strategy itself.
