After several challenging years, 2025 brings promising signs of recovery for the Nordic market, supported by various global trends and developments. We believe the M&A market will gradually become more active during 2025, assuming that no significant new uncertainties arise. This article examines our experiences from 2024, expectations for the coming year, and the influence of global developments and local trends on the Nordic corporate transaction market.
2024: A challenging year concluded with increased activity
Overall, the year 2024 was challenging for the Finnish M&A market, but activity clearly picked up toward the end of the year. Divestitures and spin-offs remained prevalent, but there was also an increase in mergers and acquisitions, indicating a positive shift. The valuation gaps between parties, a prominent issue since 2022, narrowed throughout 2024, and we expect this trend to continue in 2025.
Despite the challenging environment, our advisory service business remained active throughout the year. Eversheds ranked second among Finland’s most active corporate transaction firms in 2024, completing a total of 55 transactions.
The increased activity of international players was evident in our transactions, particularly with Northern European investors and industrial buyers eagerly participating in transaction processes. Valuation levels for high-quality targets remained consistently strong in our projects, with no significant changes observed in key contractual terms. High-quality companies in sectors such as SaaS, technical trade, industrial automation, energy infrastructure, chemicals, and defense industries generated significant interest beyond Finland’s borders. However, many capital-intensive industries, construction, and consumer businesses remained outside the focus of professional investors.
In the field of artificial intelligence (AI), significant international investment in infrastructure, such as data centers, is creating new opportunities in the Nordics for solution providers supporting these investments (e.g., energy infrastructure companies). AI was increasingly a key topic in corporate transaction discussions in 2024. Particularly, software companies utilizing AI attracted widespread investor interest. We believe that companies offering AI-driven system solutions connected to business processes will become a highly attractive and central part of the corporate transaction market. Outside of start-up/venture projects, the overall atmosphere was still somewhat cautious. With a few exceptions, tangible developments in executed transactions remained modest, as the market continues to search for winning solutions.
Improving outlook for 2025 amid global trends
The year 2025 offers a promising foundation for increased corporate transaction activity. For instance, Goldman Sachs predicts global M&A activity to grow by more than 10% this year. Key factors driving activity, such as stabilizing inflation, declining interest rates, and gradual economic recovery, are supporting the revitalization of markets globally and in the Nordics. The Bank of Finland anticipates GDP to grow modestly by about 1% in 2025, with European and U.S. economic trends underpinning moderate growth expectations. However, this progress depends on the absence of major unexpected economic disruptions.
Inflation has significantly stabilized, and interest rates have markedly declined in both Europe and the United States. Lower interest rates improve access to financing, supporting corporate transactions. Recent reports have highlighted anticipated growth in corporate transaction activity, particularly in the U.S., where regulatory developments under Trump’s presidency are expected to favor mergers and acquisitions, at least in domestic markets. However, geopolitical risks and the threat of escalating trade wars could temper growth and introduce uncertainties in the European corporate transaction market.Simultaneously, markets in the U.S. and Europe anticipate further interest rate reductions, though expectations for the Fed may be overly optimistic (e.g., strong employment figures published in early January). In the U.S., valuation levels in certain sectors of the stock market remain high, but general sentiment appears optimistic, driven by expected improvements in earnings. This could further fuel activity as major U.S. corporations seek new opportunities through corporate transactions.
According to Goldman Sachs, sponsor backed transaction volumes grew significantly globally between 2015 and 2021, but recent sales of owned companies have remained historically low. This trend is also evident in the Nordics and Finland. With many private equity portfolios nearing the end of their lifecycle and increasing pressure to return capital to fund investors, coupled with substantial dry powder, corporate transaction activity is likely to increase in 2025. Additionally, private equity firms are exploring innovative solutions, such as new fund structures, minority sales, and continuation funds.
Alongside innovation-driven solutions, traditional industrial sectors have also seen increased corporate transaction activity. A noticeable trend globally and in the Nordics in 2024 was the stronger focus on selected core business areas. This was evident in significant divestments by large multi-sector corporations, which were sold to competitors, private equity-led consortia, or via public listings. Globally, industrial companies became significantly more active in 2024, with corporate buyers accounting for 71% of global M&A activity, compared to 61% in 2021–2022, according to Dealogic.
In the Nordics, a total of 36 IPOs and technical listings were completed in 2024, 15 more than in 2023. A significant portion (23) took place in Sweden, where activity is gradually improving. In Finland, the IPO market remained mostly closed in 2024, consistent with our earlier forecasts. We expect the Finnish IPO market to remain quiet in the first half of 2025, although preparations are already well underway. The IPO market may reopen if stock market volatility decreases, economic outlooks improve, investor confidence strengthens, and overall stock valuations trend more favorably. The first IPOs in Finland could occur as early as spring, which would also improve the outlook for the corporate transaction market. For corporate transactions, the closed IPO market in Finland created challenges, particularly for private equity players, as one key exit channel remained unavailable.
Several investment bankers have recently reported an increase in sales mandates, which are expected to materialize in the first half of 2025. Many companies are well-positioned after implementing efficiency measures, and competition for high-quality targets remains intense due to increased buyer activity.
Conclusion
The year 2025 appears to offer improved conditions for the recovery of the corporate transaction market. Stabilizing inflation, declining interest rates, and gradual economic recovery lay a foundation for market revitalization in Finland and the broader Nordics.
Finland’s potential economic growth, coupled with the gradual recovery of the transaction market, provides exciting opportunities for companies and investors. This environment enables strategic positioning for future growth e.g., through corporate transactions. Although geopolitical risks and other uncertainties remain part of the operating environment, the general outlook is encouraging and significantly more favorable than in recent years.
Wishing everyone a successful new year!
