There were high hopes heading into 2025 that we would see a rebound in M&A around the world, however geopolitical and macroeconomic uncertainty meant the market was more subdued than many had been hoping for. 

Global technology, media and telecommunications (TMT) deal volumes decreased in the first half of 2025, however interestingly, global TMT deal values are up, which means we saw fewer, but higher value deals. 

In this video, we reflect on what’s already happened this year in tech M&A, and share our predictions of what we think we happen for the rest of the year and into 2026.

Outlook across Europe

Although tariff disputes between the EU and US has been a key factor in the lack of deal volume across Europe, AI is driving activity in the TMT sector, making it one of the more active industries across the continent this year, with acquirers looking to secure AI expertise for next generation software and intellectual property (IP).

The private equity (PE) sector is also active, with investors focusing on software & infrastructure, particularly data centres and fibre networks. 

The defense sector has been picking up, and we’re seeing a flurry of M&A deals, especially in Germany in the traditional defense sector, but also very large financing rounds for German defense tech companies, which we expect to continue for at least the next 12-18 months.

How is regulation impacting M&A and investment in the TMT sector in the UK and across Europe?

Merger control 

There is a lot going on in the merger control space that will affect the tech sector, and lots of change on the way, including a significant shift in how the CMA approaches mergers, following the government giving the CMA a clear strategic steer to focus on driving growth in the UK economy. This has resulted in a new framework for delivering work – referred to as the four Ps – pace, predictability, proportionality and process.

It’s good news for companies considering acquisitions in, or that might affect, the UK, as more predictability will be helpful in terms of deal planning and understanding which regimes are likely to apply. 

In terms of the EU, one of the big developments to keep an eye out for is the ongoing review of the European Commission’s merger guidelines, signalling an intention by the Commission to get to grips with the way the world is changing, with the review covering topics such as innovation, sustainability, clean tech and digitalisation. For those looking to invest in the tech sector, this guidance will be really important in understanding where and to what extent the Commission might have issues with the deal. 

The National Security Regime

The National Security Regime in the UK has had a significant impact, with notifications up 25% in the year up to the end of March 2025. It represents an important deal planning point, because once deals are caught by the regime, they must be notified and approved before they can close. 

The government is working on some technical changes to this system, including changes to some of the specialist sectors which are at the heart of the regime which will be of particular interest companies operating in the tech sector.  These include new sectors for semiconductors and critical minerals, and updates to existing sectors including advanced materials, AI, data infrastructure and synthetic biology. 

We will be keeping a close eye on these trends and will share any updates with you moving forwards.

Related content

View part 2 of our Tech M&A outlook series, which focuses on the US market, looking at what we’re seeing, market trends and outlook, as well as regulatory impacts.