In 2024,  EMEA deal volumes reached new highs and aggregate transaction value rose yoy, although remained down relative to the high reached in 2021. But what about diligence activity? Has the increase in the volume of deals had any effect on the time spent doing due diligence? And what other factors may be playing a part in diligence activity?

Diligence activity

Overall, based on Datasite’s anonymized platform data, forward-looking EMEA M&A activity is on par with all global activity, with new deals up 12% overall in 2024 versus 2023.

France was the only region to see negative new deal activity this year, though admittedly it was down only 1% yoy. It’s hardly surprising considering the ongoing political uncertainty and dissatisfaction there, as well as potential regulatory changes and high business tax rates, which are eroding investor confidence. Every other sub-region, experienced double-digit growth bar the Nordics (3% rise), with Iberia seeing a 32% surge.

Most sub-regions/countries also saw an increase in diligence times over last year. However, in the UK & Ireland, diligence times decreased by 20 days from 2023, perhaps linked to the 17% increase in the number of new deals – meaning that more deals were potentially needing to be done faster, much as occurred during the height of dealmaking during the pandemic. And if dealmakers there are utilizing the full spectrum of tools on Datasite’s platform, which aim to help increase efficiencies, that could also lead to lower diligence times.

On the other end the spectrum, Iberia and TMEA saw significant increases in diligence times of 59 and 25 days, respectively. Both these sub-regions also saw increases in deal kickoffs, so speed was not a factor here, and could possibly be attributed to cultural reasons for longer diligence times, as well as what they are using a data room for (ie file storing/sharing only).

Moreover, both these sub-regions saw fewer deals successfully closing, perhaps leading to the questions of whether more information is actually better or if it instead leads to deal stagnation or if they should be utilizing data rooms and their features more fully.

Diligence success rates

The chances of successfully closing a deal in EMEA dropped 6 percentage points in 2024 from 2023. The UK & Ireland, France, and DACH regions were likeliest to successfully close deals in 2024, while the CEE & SEE region was least likely. The good news is that many of those deals went on pause, so expect relaunches to drive a lot of 2025 activity.

Diligence by sector

In terms of sectors, in EMEA, the most deals kicked off in Consumer, Energy, and TMT on Datasite’s platform, while globally deals were more prevalent in Consumer, TMT, and Industrials. The Middle East is a big driver of energy deals, so that could account for the uptick in that sector for EMEA. Energy also saw the largest increases in diligence times, which again could be due to cultural and data room utilization factors as mentioned above; deal complexity could also be a contributing factor.

Industrials have been suffering for quite some time in EMEA, and while there was an uptick in deal kickoffs there on Datasite’s platform, fewer successfully closed than in 2023. In fact, aggregate deal value in the I&C sector continued its three-year decline, totaling €114.8bn, down 2.8% yoy and significantly lower than the €205.3bn recorded in 2021. Deal volume in the sector fared slightly better, reaching 2,749, a slight increase of 0.8% yoy. (Deal Drivers: EMEA FY 2024). So it will be interesting to see what happens in 2025.