
Germany’s M&A landscape is evolving with fewer deals but greater deal values, driven by shifting macroeconomic forces and strategic realignments among top corporates.
While M&A activity in Germany and globally in 2024 saw a rebound compared to 2023, last year’s market was still impacted by a challenging geopolitical and macroeconomic environment. Germany’s largest companies have been no exception — as shown in Freshfields' latest survey of acquisition and investment activity of the 90 largest listed companies in the DAX and MDAX stock indices over the past decade. Our survey looks back and also highlights key trends that are poised to shape the transactional landscape for German corporates.
M&A activity among the DAX and MDAX companies saw an overall decline in 2024 compared to 2023. The 40 DAX companies recorded a 14 per cent decline in announced acquisitions and investments, with deal numbers dropping from 218 in 2023 to 187 in 2024. The 50 MDAX companies saw a 21 per cent decrease in the same period, down from 68 in 2023 to 54 in 2024. This decline in deal volumes is in line with the global trend (where deal numbers were down by 13.8 per cent against 2023) and a 12.8 per cent drop in the overall number of deals in Germany.
In terms of announced transaction values, investments and acquisitions made by MDAX companies dropped by 42 per cent year-on-year, from $5.3bn in 2023 to $3bn in 2024. The DAX constituents, however, saw their total value of investments and acquisitions surge by 118 percent year-on-year, up from $18.3bn in 2023 to $39.9bn in 2024. This uptick was mainly driven by a number of deals worth over €1bn and a strong appetite for investments in the US.
M&A activity continued to be quieter in 2024 compared to some of the boom years in the past decade, and Germany has been no exception. High interest rates, tighter credit markets and geopolitical volatility definitely had a dampening effect on the risk appetite among both corporate and financial investors. At the same time, gaps in price expectations between buyers and sellers for potential acquisition targets have led shareholders to postpone sale processes until 2025.
Dr. Lars Meyer
Partner and Global Co-Head of Tech, Media & Telecoms
A higher degree of regulatory uncertainty and complexity also continues to shape the global M&A landscape and calls for more careful strategic planning. These dynamics have made cross-border transactions more challenging, time-consuming and uncertain for certain types of buyers. But they have also prompted companies to bolster domestic and near-shore operations, such as domestic production, to manage exposure to tariffs and volatility and benefit from local incentives in certain sectors. America-first trade policies exemplify this trend and are particularly relevant for German companies given their strong interest in the US market and in US-bound investments, as shown by our data.
The global trade landscape and regulatory environments reflect a broader, decade-long dynamic towards protectionism in certain regions, which is a trend that persisted in 2024. Appropriate regulatory risk management is now integral to successful M&A.
Dr. Wessel Heukamp
Partner and Co-Head of the global M&A practice
Looking ahead, our study suggests that M&A activity among DAX and MDAX companies could rebound in 2025: First, borrowing conditions are set to improve in 2025, which could unlock pent-up opportunities for inorganic growth and more ‘mega deals.’ Second, strategic challenges faced by many German corporates are driving a renewed focus on their core businesses, which we expect will prompt further portfolio realignments through acquisitions and through divestments of non-core business units. Third, macro trends such as the advancement of artificial intelligence, the ongoing realignment of global trade relations, and shifting economic policy (particularly in the US) will push corporates to continue to adapt and pivot – including through acquisitions, divestments and disposals, joint ventures and other alliances. The demand and supply of M&A targets is expected to be met by a rebound of exit and buyout activity among private capital investors in 2025.
We are not seeing deindustrialisation, but rather that the German business is focusing and transforming. And this change will remain a major driver for transactions in 2025.
Dr. Uta Itzen
Partner and Head of Antitrust, Competition and Trade practice in Germany
The M&A landscape for DAX and MDAX companies in 2015 to 2024 has mirrored the volatility of global markets and geopolitics over the past decade as well as the past twelve months.
In 2024, Germany's economy faced a convergence of challenges: high energy and borrowing costs, the pressures of geopolitical uncertainty constraining its export-driven model, and amplified competition for the German automotive sector from foreign electric vehicle makers.
These headwinds also delayed the anticipated rebound in M&A activity in 2024. Instead, we have seen another year of slowdown: acquisitions and investments announced by the DAX companies dropped from 218 in 2023 to 187 in 2024 – a 14 per cent decline compared to 2023. MDAX companies experienced a similar downturn, with deal numbers falling by 20 per cent from 68 to 54. This sharp reduction in announced deals, especially for MDAX companies, implies increasing caution among potential purchasers (for the reasons explained above) as well as gaps in valuations and deal terms between sellers and investors.
But if you look at the value invested in 2024, combined acquisitions and investments of the 90 MDAX and DAX companies saw an increase in value of 81.2 per cent. This significant uptick was driven predominantly by deals with transaction values over $1bn. This revival of larger mid-cap and large-cap transactions is a sign that where valuations are right and acquirers have gotten comfortable with the risk profile of the target company, they are still prepared to deploy significant amounts of cash or their own stock to pursue inorganic growth.
DAX companies invest massively into the US
Between 2015 and 2024, Europe emerged as the top destination for DAX and MDAX investments and acquisitions outside of Germany, with 1,078 transactions (36.6 per cent of all deals). North America followed with 696 deals, narrowly ahead of Germany at 630. Together, these three regions accounted for 81.6 per cent of all deal activity.
However, in terms of announced value, North America led, capturing 48 per cent of the total deal value over the last decade. Looking specifically at deal values in 2024, companies from DAX were the main drivers of a sharp increase in US investment, with their spending rising from $2bn in 2023 to nearly $30bn in 2024. Here, it must be noted that the three top deals count for two-thirds of this. Meanwhile, DAX companies are investing less in Europe outside Germany.
The numbers mirror the state of pragmatism and trust: Europe dominates in terms of deal count, supported by a more favourable regulatory climate for deals within the European Union. However, most of the investment flows into the US, where especially DAX companies find appropriate targets to transform their business, gain a strong foothold in the US economy and take advantage of lower energy costs. The higher hurdles for foreign investments are worth the effort.
Dr. Stephan Waldhausen
Partner and Global Co-Head of Industrial group