The global macroeconomic backdrop is expected to remain broadly consistent with 2025, with moderate growth and relative stability supporting M&A activity, particularly in the mid-market.

In 2026, mid-market M&A will take place against a backdrop of moderate global growth, with the euro area still characterised by restrictive monetary conditions in real terms, partly offset by increasingly targeted fiscal and industrial policies. In Europe—and particularly in Italy—programmes such as NextGenerationEU, alongside initiatives linked to the energy transition and industrial competitiveness, will continue to steer investment.

Globally, 2026 growth is expected to remain moderate (c. 2.5–3.0%), supported by the U.S. and selected Asian economies, while China is expected to slow gradually (c. 4.3%). Europe is also expected to post moderate growth, in line with more advanced Asian economies. Geopolitical and trade risks are likely to remain elevated; however, they are not expected to materially affect M&A activity. Global inflation should stabilise, with central banks remaining cautious and potential rate easing if growth slows, supporting credit availability.

Europe is expected to deliver moderate GDP growth in 2026 (c. 1.0–1.2%), with inflation under control (c. 1.5–2.0%) and a stable ECB monetary stance. Policy rates are expected to remain around 2% throughout 2026 (with a potential rate hike postponed to mid-2027), supporting favourable financing conditions for corporates and investors. Public investment is expected to focus on infrastructure, digitalisation and the energy transition, while private capital should increasingly target innovative industrial segments, green technologies and high value-added services—particularly B2B.

Persistent U.S.–China tensions, Europe’s economic interdependence with both the U.S. and China, and fragmented European policymaking will sustain the current uncertainty, increasing the need to strengthen competitiveness and defence to protect growth and stabilise markets—requiring greater selectivity in risk assessment. European export competitiveness remains constrained by Chinese competition, relatively high energy costs and tariff/trade barriers, with particularly visible effects in the automotive, chemicals and energy-intensive manufacturing sectors. As a result, exports are expected to contribute less to growth, with the recovery relying primarily on domestic demand (consumption and domestic investment), the strength of which remains uncertain.

In Europe, 2026 is expected to feature significant infrastructure investments, including the first disbursements of SAFE defence loans (a c. €150bn credit facility), a roadmap to close defence capability gaps by 2030, measures to reduce single-market barriers and bureaucracy, and progress on the Capital Markets Union / Savings and Investments Union (including a strengthening of ESMA and pan-European pension products).

The global macroeconomic backdrop is expected to remain broadly consistent with 2025, with moderate growth and relative stability supporting M&A activity, particularly in the mid-market.

In 2026, mid-market M&A will take place against a backdrop of moderate global growth, with the euro area still characterised by restrictive monetary conditions in real terms, partly offset by increasingly targeted fiscal and industrial policies. In Europe—and particularly in Italy—programmes such as NextGenerationEU, alongside initiatives linked to the energy transition and industrial competitiveness, will continue to steer investment.

Globally, 2026 growth is expected to remain moderate (c. 2.5–3.0%), supported by the U.S. and selected Asian economies, while China is expected to slow gradually (c. 4.3%). Europe is also expected to post moderate growth, in line with more advanced Asian economies. Geopolitical and trade risks are likely to remain elevated; however, they are not expected to materially affect M&A activity. Global inflation should stabilise, with central banks remaining cautious and potential rate easing if growth slows, supporting credit availability.

This backdrop should be supportive for mid-market M&A, with increased consolidation and roll-up activity in fragmented industries, opportunities for strategic cross-border acquisitions, and rising private equity activity focused on platform build-ups. The most dynamic sectors are expected to include industrial automation, B2B services, logistics, managed IT services and data centres, healthcare services and renewables.

In particular:

Germany: after a period of stagnation, GDP is expected to return to moderate growth of c. 1.0–1.5% in 2026 and 2027, supported by an expansionary fiscal stance (c. 1% of GDP in 2026) and higher public spending, including investment plans for defence and infrastructure (notably a c. €500bn infrastructure and climate programme) to support domestic demand. Germany is expected to continue to face weak external demand and the need for reforms to strengthen competitiveness and productivity. The M&A environment is therefore likely to be centred on consolidation and optimisation, with most activity in the mid-market rather than large, aggressive acquisitions, focusing on industrial automation, engineering and machinery, B2B services and logistics, and energy / the green transition.

France: with contained GDP growth of c. 0.9–1.0%, still-elevated public debt and an uncertain political backdrop, a modest fiscal tightening is expected in 2026–2027 amid political and fiscal risks. Relatively low inflation could support selective mid-market transactions; however, we do not expect France to be a key driver of M&A activity.

This backdrop should be supportive for mid-market M&A, with increased consolidation and roll-up activity in fragmented industries, opportunities for strategic cross-border acquisitions, and rising private equity activity focused on platform build-ups. The most dynamic sectors are expected to include industrial automation, B2B services, logistics, managed IT services and data centres, healthcare services and renewables.

In particular:

Germany: after a period of stagnation, GDP is expected to return to moderate growth of c. 1.0–1.5% in 2026 and 2027, supported by an expansionary fiscal stance (c. 1% of GDP in 2026) and higher public spending, including investment plans for defence and infrastructure (notably a c. €500bn infrastructure and climate programme) to support domestic demand. Germany is expected to continue to face weak external demand and the need for reforms to strengthen competitiveness and productivity. The M&A environment is therefore likely to be centred on consolidation and optimisation, with most activity in the mid-market rather than large, aggressive acquisitions, focusing on industrial automation, engineering and machinery, B2B services and logistics, and energy / the green transition.

France: with contained GDP growth of c. 0.9–1.0%, still-elevated public debt and an uncertain political backdrop, a modest fiscal tightening is expected in 2026–2027 amid political and fiscal risks. Relatively low inflation could support selective mid-market transactions; however, we do not expect France to be a key driver of M&A activity.

Mid-Market M&A 2026: stable rates, adequate liquidity and support from private equity and private debt as key drivers of growth and sector consolidation

Mid-Market M&A 2026: stable rates, adequate liquidity and support from private equity and private debt as key drivers of growth and sector consolidation.

This backdrop should be supportive for mid-market M&A, with increased consolidation and roll-up activity in fragmented industries, opportunities for strategic cross-border acquisitions, and rising private equity activity focused on platform build-ups. The most dynamic sectors are expected to include industrial automation, B2B services, logistics, managed IT services and data centres, healthcare services and renewables.

In particular:

Germany: after a period of stagnation, GDP is expected to return to moderate growth of c. 1.0–1.5% in 2026 and 2027, supported by an expansionary fiscal stance (c. 1% of GDP in 2026) and higher public spending, including investment plans for defence and infrastructure (notably a c. €500bn infrastructure and climate programme) to support domestic demand. Germany is expected to continue to face weak external demand and the need for reforms to strengthen competitiveness and productivity. The M&A environment is therefore likely to be centred on consolidation and optimisation, with most activity in the mid-market rather than large, aggressive acquisitions, focusing on industrial automation, engineering and machinery, B2B services and logistics, and energy / the green transition.

France: with contained GDP growth of c. 0.9–1.0%, still-elevated public debt and an uncertain political backdrop, a modest fiscal tightening is expected in 2026–2027 amid political and fiscal risks. Relatively low inflation could support selective mid-market transactions; however, we do not expect France to be a key driver of M&A activity.

European and UK banking systems remain resilient (particularly the Italian one, which may continue its consolidation path), while more flexible lending standards should improve access to credit for corporates and sponsors.

A meaningful factor could be the increased role of private debt funds—largely focused on Europe—which may support M&A in two ways: (i) by providing financing for private-equity-led LBOs, and (ii) through direct transactions with companies, offering an alternative to equity investment in targets.

Public and private investment in infrastructure, digitalisation and green sectors is strengthening demand for strategic acquisitions. European median EBITDA multiples appear to be trending upward, narrowing the bid–ask spread and facilitating deal completion. Private equity funds are also expected to accelerate exits, releasing liquidity and creating new investment opportunities. The combination of stable rates, adequate liquidity and moderately higher multiples should make the mid-market more dynamic yet increasingly selective. Overall, we believe the European macro backdrop can support an expansion in M&A activity—particularly in the mid-market—with a focus on consolidation and roll-up strategies in key sectors.

Mid-Market M&A 2026: Positive momentum and a broad-based recovery across Europe and Italy

After the 2025 rebound—largely concentrated in mega-deals—2026 is expected to mark a broader, more widespread recovery in mid-market M&A, both in Europe and in Italy.

This momentum should be supported by improved access to financing, a narrowing of valuation gaps between investors and entrepreneurs, and an acceleration in portfolio reallocation and rationalisation by major industrial and financial groups.

In this context, Italy could outperform the European average in terms of deal count, supported by the reopening of the mid-market segment, which may return to full activity after a period of greater caution. The momentum seen in the second half of 2025 is expected to carry into 2026, aided by lower financing costs, normalised valuation parameters and a narrower valuation gap between investors and entrepreneurs, with a gradual broadening of mid-market activity.

In summary, supported by a robust pipeline at the end of 2025, a higher number of transactions, increased willingness among mid-sized companies to pursue M&A, better alignment of multiples and higher average deal sizes—together with stable or improving financing conditions—the M&A market is expected to enter 2026 with positive momentum already in place.

Mid-Market M&A in Italy 2026: consolidation, private equity and sector opportunities

In 2026, the Italian mid-market M&A segment is expected to consolidate and broaden the recovery that began in the second half of 2025, benefiting from more stable financing conditions, lower rates, a narrowing valuation gap between buyers and sellers, and greater capital availability from private equity and private debt funds.

European and UK banking systems remain resilient (particularly the Italian one, which may continue its consolidation path), while more flexible lending standards should improve access to credit for corporates and sponsors.

A meaningful factor could be the increased role of private debt funds—largely focused on Europe—which may support M&A in two ways: (i) by providing financing for private-equity-led LBOs, and (ii) through direct transactions with companies, offering an alternative to equity investment in targets.

Public and private investment in infrastructure, digitalisation and green sectors is strengthening demand for strategic acquisitions. European median EBITDA multiples appear to be trending upward, narrowing the bid–ask spread and facilitating deal completion. Private equity funds are also expected to accelerate exits, releasing liquidity and creating new investment opportunities. The combination of stable rates, adequate liquidity and moderately higher multiples should make the mid-market more dynamic yet increasingly selective. Overall, we believe the European macro backdrop can support an expansion in M&A activity—particularly in the mid-market—with a focus on consolidation and roll-up strategies in key sectors.

Mid-Market M&A 2026: Positive momentum and a broad-based recovery across Europe and Italy

After the 2025 rebound—largely concentrated in mega-deals—2026 is expected to mark a broader, more widespread recovery in mid-market M&A, both in Europe and in Italy.

After a slowdown in the first half of 2025—driven by tariff-related uncertainty and geopolitical tensions, with a decline in both deal count and value and a strong domestic component dominated by financial investors—the second half of the year saw a meaningful rebound in announced deals, pointing to improving prospects.

The Italian market remains structurally fragmented and dominated by family-owned businesses. As such, the role of funds as catalysts for business continuity, facilitators of professionalisation/managerialisation, and promoters of buy-and-build strategies remains central.

The most dynamic sectors are expected to include industrial automation, digitalisation and managed IT services, HVAC and energy efficiency, logistics and infrastructure, healthcare, and renewables—alongside traditional fragmented industries where private equity can support consolidation and the build-up of mid-market platforms. These include specialty chemicals, the production and distribution of innovative materials, selected packaging segments, waste management and circular-economy services, as well as food processing and agri-food.

On the investor side, private equity and family offices are expected to continue driving a large share of transactions, while industrial groups will focus on targeted acquisitions aimed at strengthening their competitive positioning or integrating existing platforms. Advisor activity is expected to remain strong, with a meaningful international component, as Italian companies continue to attract cross-border interest.

In summary, 2026 could see a more active, selective and strategic Italian mid-market, with sector consolidation led by funds, valuation normalisation and greater deal certainty, supported by a more favourable capital markets and credit environment.

This document aims to examine the key trends in the M&A market involving companies headquartered in Italy—both as targets and as acquirers—in 2025. The analysis is based on data available on Mergermarket, excluding certain transactions, such as debt portfolio disposals and other specific transactions. The analysis focuses on transactions announced in 2025, which were not necessarily completed in the same year, and does not claim to be complete or exhaustive.