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Gerald Schustereder
Partner Deals Transaction Services and German TMT Deals Leader
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Shifting Dynamics in Germany’s TMT Deal Landscape for 2026
Like the broader stock market, the M&A market was characterised by rapid changes in 2025. Although the US administration’s announcement of unexpectedly high tariffs in April 2025 led to a lot of M&A being briefly reconsidered, US financial market deregulation and a massive demand for AI investment pushed overall global deal values in the Technology, Media & Telecommunications sector (TMT) up by 49% in 2025 compared to 2024. This development was driven mainly by an 82% increase in tech deal value in the Americas, largely thanks to a concentration of US megadeals in areas such as AI, data centres, media streaming and gaming.
However, this did not directly translate to the German M&A market. Compared to 2024, German TMT deal volume dropped by about 14% to roughly 500 deals in 2025. This is a new post-pandemic low, but is still more than 40% above pre-pandemic levels, suggesting that the market may simply be gradually normalising rather than being in a structural decline.
The German Industrial Manufacturing sector caught up to TMT and saw about the same number of transactions in 2025, most likely due to Federal Government investment in defence and infrastructure. TMT and Industrial Manufacturing were followed by the Consumer Markets sector, with around 280 deals.
Once again, private equity (PE) investors were responsible for the lion’s share of M&A in the TMT sector, leading in more than two thirds of reported acquisitions. However, the share of investment from corporate buyers grew by several percentage points compared to 2024.
Technology
As in previous years, the Technology sub-sector accounted for the vast majority of German TMT deals in 2025: it was responsible for 88% of transactions, compared to 8% in Media & Entertainment and 4% in Telecommunications. Owing to the large number of transactions in Technology as a whole, we have broken down this sub-sector into its individual industries to take a closer look at investment trends.
Media and Entertainment
US megadeals dominated the headlines in Media & Entertainment, such as the bidding war between Netflix and Paramount Skydance for Warner Bros. Discovery and the take-private of Electronic Arts. Nonetheless, Germany also saw significant deals in this space in 2025.
RTL Group signed a definitive agreement to acquire Sky Deutschland – serving Germany, Austria and Switzerland – from Comcast. Taken together, RTL streaming services and Sky Deutschland reach 11.5 million paying subscribers. Sky had been struggling to compete with international streaming giants in these markets, but also owns important sports rights for the Bundesliga, the German Cup, the Premier League and Formula 1. Taking on these rights will enable RTL to significantly increase awareness of its other content. This deal has further increased RTL’s focus on video content, continuing a shift which began with its divestment of the print brands BRIGITTE, GALA and ELTERN to Funke Mediengruppe.
Other major deals included Italian MediaForEurope taking control of ProSiebenSat.1 after several years of accumulating stake – this was finally enabled by PPF Group tendering their share to MediaForEurope. Meanwhile, Freenet’s 74.6% subsidiary Waipu.TV is preparing for an IPO, as minority shareholders want to exit their investment.
An adjacent area where we expect to see deals in the near future is professional sports, which is clearly an attractive field for investors at the moment: some Middle Eastern sovereign wealth funds are targeting this segment in particular. Although investing directly in sports teams is generally not an option in Germany, sports marketing agencies such as Sportfive, which owner HIG Capital is looking to sell, can still provide exposure.
The advertising space saw M&A activity in 2025 as well. Discussions on taking the multi-billion-euro advertising giant Ströer private continued throughout the year but were so far unsuccessful; most bidders withdrew early on due to mismatched pricing expectations, and the last potential buyer, I Squared Capital, has now also pulled out. Meanwhile, Axel Springer announced the sale of its sizeable affiliate marketing unit Awin, which it values at €650m, while the IONOS Group is preparing its adtech business Sedo for sale, deeming it to be outside of the group’s core business.
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Telecommunications
The European telecommunications market, being highly regulated and fragmented, has traditionally had low margins compared to the US. M&A in the industry is therefore limited to slow but steady consolidation.
Significant portions of German tower infrastructure have been refinanced and sold to financial investors in recent years. In 2025, tower infrastructure deals were focused on other European markets, but experts see United Internet’s recent move as preparation for further consolidation in Germany. The tech conglomerate merged its mobile network and fibre-optic businesses into one entity, fuelling speculation that collaboration or even consolidation with Telefónica was afoot. We also saw consolidation in telecom services and marketing firms in 2025, with Freenet buying the German arm of Swiss competitor Mobilezone.
In recent years, the German fibre-optic rollout has been driven by both public subsidies and huge amounts of private capital, while many operators are small and sub-scale. The severe mismatch between available capital and limited construction capacity, combined with general inflation, has led to rapidly rising costs. In addition, the complexity of the rollout was often underestimated, with challenges caused by varying geology and long permitting processes slowing down construction. Besides higher costs for the rollout itself, rising interest rates have further increased capital requirements, making Germany’s fragmented fibre-optic market – with more than 250 operators – ripe for consolidation.
A year ago, we highlighted early signs of distress and examples of consolidation, such as Infrafibre being bought by Unsere Grüne Glasfaser. But in 2025, it became apparent that even the larger, more prominent players are having a hard time refinancing and filling the financial gaps caused by construction costs being higher and consumer uptake being lower than assumed in their business cases.
The owners of Deutsche Telekom’s most prominent competitor in the fibre-optic market, Deutsche Glasfaser, tried to raise equity twice in 2025. They also reduced their target for homes passed from 6 million to 3.2 million, citing high costs of capital. Given that Deutsche Glasfaser already has nearly 3 million homes passed, it would appear that the company is now planning only to finish current projects and pivot to increasing consumer uptake instead of starting more new construction.
As Deutsche Glasfaser is the second-largest player in the German fibre-optic market (beaten only by incumbent Deutsche Telekom) and smaller companies do not have the same economies of scale as these larger players, it is likely that broader consolidation of Germany’s fragmented market will start sooner rather than later. Northern Fiber Holding, for example, is in a similar position to Deutsche Glasfaser – attempts to raise equity have failed and the company now needs to find a solution to satisfy its creditors – while Eurofiber’s German subsidiary is in the middle of being sold.
At the same time, Deutsche Telekom’s CEO announced that his company had achieved a record of 1.7 million new homes passed in the first three quarters of 2025. Deutsche Telekom is selectively driving consolidation, recently acquiring smaller competitor Dokom21, which serves 25,000 households, while also heavily investing in data centre projects as mentioned above.
Market outlook
The year-end statistics for 2025 confirm our mid-year assessment that overall dealmaking in the German TMT market has declined from its post-pandemic high of 2023. However, higher government spending in Germany for defence and infrastructure is expected to provide a major stimulus to the German economy. This will primarily affect other sectors such as Industrial Manufacturing and Construction, but is likely to have some impact on TMT as well thanks to the chips and software required for modern defence equipment, alongside externalities from other sectors.
While raising capital seems to be getting more difficult for some PE houses, large and successful management firms are experiencing fewer issues, and there is still plenty of dry powder from previous years available for investment. There is also a significant exit backlog among European PE investors compared to their US counterparts, and valuations are lower in Europe than in the US, both of which give cause for optimism for a strong M&A market in 2026.
On the flip side, there are risks that could significantly and unpredictably impact the global and European economy, and thus M&A. One major factor is rising uncertainty, driven by geopolitical tensions and trade conflicts with the US and China. Servicing debt taken on for the massive AI and data centre investments in the US may also become a struggle, and could have impacts on investment on a global scale. However, it may take several more years for these issues to materialise – if they materialise at all.
Recent years have seen take-privates favoured over IPOs, including the delisting of SUSE, Software AG, CompuGroup Medical and SNP Schneider-Neureither & Partner SE. Now the IPO market appears to be gaining momentum again: in the US, 2025 was the best year for IPOs since 2021. Germany’s TMT market saw the IPO of Innoscripta in 2025, and several companies have the potential to go public in the near future, including Celonis, StepStone, GSG GENII Software and Think-cell Group.
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