Central and Eastern Europe (CEE) recorded a historic surge in investment in 2025, with mergers and acquisitions (M&A) reaching €42.5 billion, the highest level ever recorded in the region.
Despite challenges such as the war in Ukraine, Germany’s economic slowdown, and global trade tensions, the region managed to attract strong foreign investment. The findings come from a new report released by Forvis Mazars and Mergermarket.
Larger Deals Drive Record Investment
The total value of deals in Central and Eastern Europe rose by 36% compared with the previous year, even though the number of transactions slightly declined.
Around 1,300 deals were completed in 2025, which represents a 9% drop in total deal volume. Analysts say this happened because investors focused on fewer but larger transactions rather than multiple small deals.
One of the biggest deals of the year was the €4.1 billion acquisition of Czech pharmaceutical company Zentiva by US investment fund GTCR, making it one of the largest foreign investments in the region in recent years.
Experts say economic uncertainty in major European markets, particularly Germany, made investors more selective in choosing investment opportunities.
Foreign Investors Continue to Lead the Market
Foreign investors remain a major force behind the region’s investment growth.
According to the report, investors from outside the region accounted for 43% of all deals and 54% of the total deal value in 2025.
Most of these investors came from the United States, the United Kingdom, Germany, and France. However, investment activity from within the Central and Eastern European region itself has also been gradually increasing.
By comparison, foreign investors represent less than 20% of the M&A market in North America, highlighting how international capital plays a larger role in the CEE region.
Central and Eastern Europe Seen as Gateway to European Markets
Several factors make Central and Eastern Europe attractive to investors.
The region benefits from strong economic growth, European Union membership, regulatory stability, and a highly skilled workforce. In addition, operating costs in many CEE countries are lower than in Western Europe, making the region appealing for companies looking to expand.
Its geographical location is another major advantage. Central and Eastern Europe provides companies with easy access to the European Union’s market of more than 500 million consumers.
Because of this strategic position, many global businesses view the region as a gateway to the wider European market.
Regional Integration Strengthens Investment Confidence
Recent developments in regional integration have also improved investor confidence.
Countries such as Romania and Bulgaria joining the Schengen Area, along with Albania moving closer to European Union membership, have increased stability and predictability for investors.
These developments are expected to further strengthen cross-border investment in the coming years.
Technology, Finance and Healthcare Lead Investment Activity
In terms of deal numbers, the technology sector attracted the highest number of investments in 2025.
Investors showed strong interest in:
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Software companies
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IT services providers
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Fintech businesses
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Digital infrastructure companies
However, when measured by deal value, financial services led the market, reaching €11.7 billion in total investment.
The largest deal in the region was the €6.8 billion acquisition of a 49% stake in Santander Bank Polska by Austria’s Erste Group.
Key Countries Driving Investment Growth
The report highlights five countries that attracted the most investment activity in Central and Eastern Europe:
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Poland – the largest and most dynamic market in the region
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Austria – a key gateway between Western and Eastern Europe
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Czech Republic – known for its strong industrial base
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Romania – rapidly growing economy attracting new investors
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Lithuania – a rising technology and fintech hub
Poland has become particularly significant. In 2025, it became the first Central and Eastern European country to surpass $1 trillion in combined GDP, strengthening its position as a major economic player in Europe.
Private Equity Shows Signs of Recovery
Private equity investment in the region is also beginning to recover after a challenging period.
Between 2022 and 2024, many funds struggled to exit earlier investments, making it difficult to attract new capital. However, analysts say the situation is gradually improving.
Rising public spending, strong inflows from European Union funds, and improving economic conditions are helping restore investor confidence.
Experts remain cautiously optimistic about the future of the region’s investment market.
