The global mergers and acquisitions (M&A) market has experienced significant fluctuations in recent years, shaped by macroeconomic challenges, geopolitical instability, and the ongoing recovery from the pandemic. Despite these challenges, the market has shown resilience, with certain sectors and regions demonstrating strong growth potential. [1]
In 2024, global M&A volume reached USD 3.4 trillion, marking an 15% increase from the previous year. This modest recovery reflects optimism among investors amid ongoing economic uncertainties. [2]
However, the outlook for 2025 appears promising, as central banks in the US and Europe have started to lower interest rates, easing financing conditions, while a degree of political stability has returned following a record number of elections globally. These factors are expected to support a stronger rebound in deal-making activity in the upcoming year. [3]
In 2024, mergers andacquisitions were predominantly driven by the technology, industrialmanufacturing, and healthcare sectors, emphasizing their central role indeal-making activity. This trend is expected to continue into 2025, with these sectors maintaining their prominence in the M&A landscape. [4]
[1] McKinsey & Company
[2] Mergermarket
[3] Goldman Sachs
[4] BCG
In 2024, the distribution of global M&A activity highlighted significant regional disparities, with advanced economies leading the way and emerging markets gradually increasing their share in specific industries.
In 2025, Asia-Pacific is expected to lead M&A growth, driven by advancements in technology, renewable energy, and cross-border investments in emerging markets. Europe will focus on financial services consolidation and energy transition, while North America will maintain dominance through private equity and innovation in tech and healthcare.
[5] Mergermarket
[6] Mergermarket
The Western Balkans have emerged as a dynamic region for M&A driven by strategic investments in key sectors such as energy, infrastructure, and technology. In 2023, EIB Global invested a record-breaking €1.2 billion across the Western Balkans, focusing on sustainable and energy transition projects to support the region's EU accession and economic development.
1. Renewable energy - Countries in the Western Balkans, including Serbia, are prioritizing energy transition projects as part of their commitment to sustainability and EU integration. Although the renewable energy sector in the region is still in its early stages, it has attracted significant investments over the past few years. This market is characterized by a few dominant players, a significant number of micro-players, and a small number of mid-sized players.
2. Financial services - Consolidation in the banking sector remains a key trend, driven by regulatory changes and the need for scaleto remain competitive;
3. Technology - The tech ecosystems in countries such as Slovenia and Serbia are rapidly growing, with a notable rise intech-related M&A activity, reflecting increased investor interest in these sectors. Notable, in 2023, Luxembourg-based Rucio Investment successfully completed a buyout bid for Slovenian software developer Datalab Tehnologije for approx. €24.1 million.
[7] EIB
Despite a global slowdown in M&A activity in 2023 due to economic and geopolitical challenges, Serbia’s market remained stable and resilient, with most transactions driven by strategic objectives and interest from financial investors.
According to Statistical Office of the Republic of Serbia, fixed investments reached 23.4% of GDP in 2023, with government investments at 6.4%. Initiatives like the “Leap into the Future - Serbia Expo 2027” are expected to raise the investment share to 27% in the medium term.
Serbia is a leading FDI destination in Southeast Europe due to its central location, free trade agreements, and low labor costs. Sectors like infrastructure, energy, and technology see significant interest. FDIs in 2024 reached a record-high of over €5 billion, surpassing the previous peak of €4.6 billion in 2023. The largest investor was China, whose projects significantly contributed to diversifying the sources of investment.
1. Tech and IT services - Serbia's technology sector has become a significant component of the country's economy, with Belgrade emerging as a central hub for startups and innovation. Noteworthy deals include acquisitions of AI and fintech firms by Western investors. For instance, in November 2022, Noventiq, a global digital transformation services provider, acquired a controlling stake in Serbia's Saga Group, a company renowned for its digital banking solutions and AI-driven products.
2. Renewable energy - The government’s focus on green energy transition has spurred M&A activity, particularly in wind and solar energy projects. The major renewable energy companies present in Serbia are Masdar and Fintel Energija (Wind), Nova Commodities (Solar), New Energy Solutions (Wind), and CWP Renewables (Wind, Solar, Biomass).
3. Manufacturing - Serbia's manufacturing sector was previously very attractive due to low labor costs. However, recent trends show a shift, with a growing shortage of manpower. To address this, the Government amended the Law on Foreigners and the Law on Employment of Foreigners in 2023, facilitating the recruitment of foreign workers to fill gaps in the labor market. The law simplifies the process for foreign nationals to obtain work permits, allowing manufacturers to more easily hire workers from abroad.
4. Real estate - The real estate sector has seen significant growth, especially in the development of industrial and office properties.
5. Private Equity is moving closer to service industries (Customs Support for example), and M&A trends in Serbia might be driven by the mid-market Private Equity activity of Western Europe.
[8] National Bank of Serbia
Cultural and geopolitical barriers pose significant challenges for investors engaging in Serbia’s M&A market. Variations in business practices, corporate governance standards, and negotiation approaches often create potential form is understandings or delays in closing deals.
Serbia's unique geopolitical stance adds to the complexity, balancing relationships with the European Union alongside close ties to non-EU powers such as China. For foreign investors, navigating these dynamics requires a deep understanding of local realities. Successfully mitigating risks and building strong partnerships depends on adopting a nuanced strategy incorporating local expertise and carefully chosen alliances.
Numerous M&A deals have been completed across various industries in the Western Balkans, particularly in Serbia. Here are some that have marked the region:
At Systema Capital Partners, we believe the global and regional M&A landscapes in 2025 will bring unique opportunities for growth and innovation. In particular, we see technology, energy, and healthcare continuing to lead deal-making activities.
Serbia is poised to play a crucial role in the Western Balkan's economic evolution. Key sectors like renewables will gain momentum as Serbia moves toward its decarbonization targets, aligning with global ESG imperatives. Data centers will emerge as a critical investment area, driven by increasing digitalization and the need for enhanced infrastructure. Additionally, we foresee robust M&A activity as generational transition will reshape industries and create new opportunities for consolidation and innovation.
From our perspective, success in this evolving market will require strategic foresight and local expertise. Investors must navigate challenges, including legislative in consistencies, cultural differences, and geopolitical risks. We believe informed decision-making and tailored strategies will be the key in unlocking the region's full potential.
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