Billions Flow into Central and Eastern Europe: Record Investments Despite Uncertainty

Warsaw. Photo: "Nasha Niva"

According to the report "Inbound M&A Investment in Central and Eastern Europe 2025/2026," prepared by Forvis Mazars, the disclosed value of acquisitions and mergers in the region grew to 42.5 billion euros, a 36% increase over the previous year, writes Euronews.

Investments in Central Europe. Fewer Deals, More Money

Despite a 9% decrease in the number of deals, the volume of capital flowing into the region was greater than ever. Experts emphasize that this was a result of focusing on large assets.

In 2025, 1312 deals were announced in the region, compared to 1446 a year earlier. The decrease in the number of deals, however, does not mean that investor interest has waned. On the contrary, capital focused on the largest acquisitions.

The best example was a deal in the pharmaceutical sector: the American fund GTCR acquired the Czech group Zentiva for 4.1 billion euros. This was the largest foreign investment in Central and Eastern Europe made by an investor from outside the region in recent years.

According to experts, the reasons for the decrease in the number of deals are largely external. Problems in Europe's largest economy led companies and funds to make more cautious decisions.

"The slowdown in economic growth in Germany made people abandon investments. This situation spread to the central and northern areas of Central and Eastern Europe," notes Andrija Garofulič from Forvis Mazars.

Central and Eastern European Countries: Gates to Europe

The report shows that foreign investors remain the backbone of the M&A market in Central and Eastern Europe. They typically account for over 40% of the number of deals and up to three-quarters of their value.

In 2025, the share of investors from outside the region was 43% by number of deals and 54% by value. In comparison, foreign investors account for less than one-fifth of the market in North America.

One of the key advantages of Central and Eastern Europe is its location. Proximity to 500 million European Union consumers, a developed transport network, and growing digitalization attract companies from all over the world. Thus, Central and Eastern Europe remains a "gateway" to Europe for global capital. This is facilitated by legal stability, infrastructure, and access to the EU market.

As Andrija Garofulič says: "Everyone wants to be closer to their customers. The Central and Eastern European region offers proximity to key markets, a skilled workforce, and yet cheaper prices than in some other regions. It makes a lot of sense to have production or your own industrial enterprises in the Central and Eastern European region."

Integration processes are an additional incentive. Albania is approaching EU membership, and Romania and Bulgaria have joined the Schengen Area. This increases the predictability and security of investments.

Technology, Healthcare, and Finance at the Forefront

The largest number of deals in 2025 was in the technology sector – 20 investments. However, in terms of value, financial services led with a total volume of 11.7 billion euros. The largest event was the acquisition of a 49% stake in Santander Bank Polska by Erste Group for 6.8 billion euros.

After a challenging period from 2022-2024, private equity funds are starting to gain momentum. "Private investment companies couldn't exit businesses, so there was no opportunity to present them to new investors. This made fundraising very difficult," admits Garofulič.

However, the situation is improving, and new funds are entering the market. Local players are becoming increasingly active, the report states. They are particularly interested in technology, healthcare, and professional services.

Outlook for 2026

The report's authors are moderately optimistic. They note increasing government spending, EU funds, and an improving economic situation. "Government spending is high, a lot of money is coming from EU funds, and the economy is developing well. A positive market sentiment is one of the key elements, because money is available," emphasizes Garofulič.

But there are also risks – the geopolitical and political situation, including elections in several countries in the region and trade relations between the US and China. However, if stability persists, Central and Eastern Europe could remain one of the most interesting investment markets in the world.

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