As Q4 and 2025 draw to a close, it’s a good moment to look at how dealmaking has played out across different parts of Europe over the year. We’ve approached this through the lens of Sorainen and Schoenherr – the two firms that led Mergermarket’s Central and Eastern Europe (CEE) deal count after Q3.
With Sorainen operating across the Baltics and northern CEE, with close links into the Nordic market, and Schoenherr having a strong presence across central CEE as well as the DACH region, the two firms together offer a broad European vantage point.
At Dillien, we’re proud to have both firms among our customers, and we spoke with Schoenherr partners Vladimír Čížek (Prague) and Paweł Chyb (Warsaw), as well as Sorainen partner Toomas Prangli, who heads the firm’s M&A practice across Estonia, Latvia, and Lithuania, about how they experienced the year now coming to an end, and what they expect heading into 2026.
Deal activity in 2025: steadier momentum, but diverging regional patterns
Across central CEE, Schoenherr describes 2025 as a stronger year than 2024, marked by a steadier flow of transactions and fewer start–stop processes.
“Compared to 2024, we’ve seen much less of the start–stop dynamic,” says Vladimír Čížek, pointing in particular to activity in the small and mid-cap segment.
In the Baltics – a region that, despite its relatively small size, has accounted for a meaningful share of deal activity within the broader CEE market in recent years – the picture is slightly different. Lithuania has continued to show the strongest growth within the region, but market dynamics in the Baltics have shifted somewhat over the last year. According to Toomas Prangli, deal volumes have edged down in 2025, while deal values have increased materially, driven largely by foreign investors growing more comfortable with the macroeconomic and geopolitical environment. In most Baltic transactions, buyers now come from outside the region.
Prangli adds that headline deal numbers mask a broader behavioural change in the market:
“Around 40–50% of deals that reach lawyers’ desks are aborted before signing – something we didn’t see four or five years ago – and shows that the FOMO effect is still absent.”
Sector activity: tech-led breadth, with local contrasts
Deal activity in 2025 has been broad-based rather than driven by a single theme. Schoenherr reports sustained activity across IT and technology, automotive and industrials, HVAC, fintech and payment services, food & beverages, and healthcare, reflecting the firm’s broad, sector-wide footprint across central CEE.
In the Baltics, IT and technology remain the backbone of deal flow, supported by a dense pipeline of emerging companies and a vibrant startup ecosystem. Sorainen also highlights strong activity in consumer and services-related transactions, which have been among the more active segments in the Baltic market this year.
“IT and technology have traditionally been the most active sector in the Baltics, and that trend has clearly continued in 2025,” Prangli notes.
Both firms point to defence and logistics as sectors with visibly higher activity across several jurisdictions. Energy also continues to feature prominently in parts of central CEE, although Prangli notes that energy activity in the Baltics – while still present – has gradually cooled after several years as a leading sector.
A recurring theme beneath sector activity is consolidation, though with different local expressions. Schoenherr highlights healthcare consolidation in Poland, extending trends first seen in the Czech market, while Sorainen observes consolidation driven by maturing sectors and generational change across the Baltics.
In venture capital, Sorainen continues to see strong interest in AI-driven companies and deep tech, including life sciences. Defence stands out as the clearest growth area in Baltic venture activity, supported by the region’s startup ecosystem and the current geopolitical environment, with Ukrainian defence-tech teams increasingly using Estonia as a base to incorporate, raise capital, and obtain EU regulatory compliance.
Deal dynamics: still a buyer’s market
Despite improved momentum, deal execution has become more demanding. Schoenherr observes that negotiations around valuation and structure are taking longer, with pricing gaps requiring more work to bridge.
“Aligning expectations simply takes more time than it used to,” says Čížek, pointing to more intensive discussions around price and deal structure.
Sorainen echoes this view, describing a market that remains firmly buyer-led, with flexibility on structure and timing often required to reach agreement and a higher share of processes failing to reach signing.
Outlook: cautious optimism heading into 2026
Looking ahead, both firms strike a cautiously optimistic tone. Schoenherr points to a solid Q4 and a growing outbound appetite among regional investors.
“Q4 has been solid and sets a good foundation for 2026,” says Vladimír Čížek.
Sorainen also expects transaction activity in the Baltics to pick up in 2026, driven by improving macroeconomic conditions, continued consolidation, generational change, venture-backed technology companies reaching exit stage, and private equity funds beginning to divest portfolio assets.
“Let’s see which of these predictions hold true next year,” Toomas Prangli concludes.
