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Takeovers in Germany popular but expensive

According to the current M&A panel of CMS and Finance, German companies are driving the M&A market - but purchase prices are skyrocketing.

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2 min read
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Germany’s mergers and acquisitions (M&A) market is experiencing record-high purchase prices in 2025. Valuations across many sectors have surged, driven by fierce competition for attractive targets. Corporate executives now rate price developments at an all-time high of 7.95 on a scale of 10, signalling an unprecedented boom in deal-making activity.

Private equity firms are playing a dominant role in pushing up prices. They have poured 49.9 billion dollars into four of the five largest German deals this year. With 4.2 trillion dollars of global capital under pressure to invest, firms like Goldman Sachs and foreign infrastructure investors, such as those targeting Tennet, are intensifying competition. This flood of capital has made regulatory hurdles less of a concern, as M&A leaders now rate the likelihood of objections at just 3.35.

Companies are increasingly focusing on expanding within familiar markets rather than venturing into new ones. This strategy scores 6.88 on a 10-point scale, reflecting a preference for consolidation over risk. Over three-quarters of corporate M&A departments plan further acquisitions, mostly in sectors where they already operate. Organic growth remains the primary driver, scoring 8.59, while internal funds—rated 8.29—are the preferred financing method.

Despite the current surge, some experts believe the peak may have passed. M&A advisors have given the likelihood of continued market improvement a score of 4.74, the lowest since 2011. German firms are still leading the charge, with more acquisitions than divestments in the domestic market. Many are also relying more on in-house expertise, using external support for no more than half of their deals.

The German M&A market remains highly active, with private equity and corporate liquidity fueling high valuations. While expansion in known markets is the dominant strategy, signs suggest the boom could be slowing. Companies continue to prioritise organic growth, but future deal volumes may depend on sustained economic confidence.

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