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New M&A Landscape Emerges as Buyers Grow More Selective

The German M&A market is poised for a moderate rebound in 2026, but it will be a far cry from the exit boom many had expected, according to Kai Hesselmann, co-founder of dealcircle, a technology platform for M&A transactions.

After two years of stagnation, the market is set to see renewed activity, but the recovery will be selective, with a focus on profitable, more resilient mid-cap assets. Broad auctions are giving way to more targeted processes as buyers become increasingly discerning.

"2026 will not be the year of the exit boom, but rather the beginning of a new reality," Hesselmann said. "Capital is available, but it's expensive. While buyers are active, they are also more selective."

This shift in the M&A landscape is being driven by a confluence of factors, including demographic changes, consolidation pressures, and the growing influence of private debt. Startups and tech companies looking to strike deals will need to demonstrate not just financial firepower, but also operational excellence and a clear value-creation story.

"Whoever wants to do deals in 2026 needs not just capital, but also structure, patience and a clear value-creation story," Hesselmann said.

The exit market is thawing, but it remains selective, with broad auctions giving way to more targeted processes. This means that for startups and growth companies, financing will remain challenging, as the focus shifts away from valuation fantasies and towards resilience, cash flow, and operational excellence.

"The rules of the game are changing faster than any economic cycle," Hesselmann said. "The coming year will not be a comeback of the old M&A market, but the start of a new reality."

According to industry sources, the mid-cap and tech segments are particularly affected by this shift, as buyers prioritize operational performance over growth potential. This could create opportunities for well-run, cash-generative businesses, but may pose challenges for earlier-stage startups seeking exits.

Regulatory and market factors, such as rising interest rates and increased scrutiny of deals, are also shaping the new M&A landscape. Advisors and dealmakers will need to navigate this evolving environment, balancing the needs of buyers and sellers to facilitate transactions.

As the German M&A market enters a new phase, companies seeking to capitalize on the available opportunities will need to demonstrate resilience, operational excellence, and a clear strategic rationale - a shift that could redefine the rules of the game in the years to come.