Transaction Radar 2026: Estonian deal volumes shrink while global mega-deals surge

According to the Ellex Transaction Radar, 81 transactions were recorded in Estonia during the first half of 2026, significantly below the 108 transactions completed in the second half of 2025. Geopolitical uncertainty and the Hormuz Strait crisis slowed the market’s recovery. The report was prepared by Ellex Estonia experts Risto Vahimets, Alla Kuznetsova, Merlin Liis-Toomela, Rutt Värk, Martin Mäesalu, Miikael Tuus, and trainee Elit-Marlene Agu.

Ellex Estonia has published its Transaction Radar for the first half of 2026, highlighting a clear downward trend in the Estonian M&A market. The number of transactions has now declined for four consecutive quarters: 54 transactions were recorded in both Q3 and Q4 2025, followed by 44 in Q1 2026 and 37 in Q2 2026. Compared to the second half of 2025, total deal activity has fallen by almost 33%.

According to Ellex partner Risto Vahimets, repeated crises are preventing economic cycles from reaching their traditional peaks and troughs. “We are no longer seeing the pronounced highs and lows that typically characterise market cycles. Dealmaking expectations and forecasts have repeatedly been interrupted by successive crises, and the same was true this half-year. Transactions did take place, and some of them were particularly noteworthy, but the overall numbers remain disappointingly modest,” said Vahimets.

Estonia: 81 transactions as defence becomes mainstream

A total of 81 transactions were recorded in Estonia during the first half of 2026, including:

• 27 venture capital and technology transactions;
• 4 real estate transactions;
• 11 capital markets transactions (including private placements);
• 39 traditional mergers mergers and acquisitions (M&A).

Of the M&A transactions, 22 were completed in the first quarter and 17 in the second quarter, marking a sharp decline over the course of the year. By comparison, 108 transactions were recorded during the second half of 2025, including 52 M&A deals.

The most notable transactions of the half-year included Prisma’s acquisition by Coop, the sale of Hansabuss to Finnish private equity fund CapMan Infra, and two acquisitions by Peter Thiel-backed Quantum Systems – Hevi Optronics and SensusQ. These deals underscore the growing international recognition of Estonia’s defence technology expertise. The defence sector has now moved beyond the fundraising stage and entered a phase of strategic acquisitions and consolidation. In June, Penta Hospitals acquired the operating business of Südamekodud to enter the Baltic market and use the company as a platform for expansion in the elderly care sector.

Deal activity in Estonia was primarily driven by retail and consumer markets (Coop, TKM Grupp, Rimi Baltics), healthcare (Pharmapark, Tallinna Hambakliinik, Fertilitas, Silmäasema, Südamekodud), logistics and infrastructure (Havi Logistics, Hansabuss, Pakrineeme Port), and technology and IT (Messente, Envoice, Replicant IT, Vespia, Webware).

The largest technology funding round was completed by Skeleton Technologies, which announced the first closing of its pre-IPO financing round in May 2026, raising EUR 33 million as part of a financing package of up to EUR 392 million ahead of its planned US listing in 2027. In defence technology, Frankenburg Technologies stood out with a EUR 30 million Series A round led by Plural, while Farsight Vision secured EUR 7.2 million in seed financing led by Axon Enterprise and SmartCap.

Global Outlook: Record-Breaking Mega Deals While Smaller Transactions Wait

While transaction volumes in Estonia and the wider region declined by double digits during the first half of 2026, total deal value increased by 28%, driven primarily by some of the largest transactions seen in Europe in recent decades.

Europe stood out for its exceptional mega-deal activity, with nearly half of all transactions exceeding USD 10 billion involving European participants. Key transactions included the merger of Unilever’s food business with McCormick (USD 44.8 billion), Kone’s acquisition of Thyssenkrupp Elevator (USD 34.4 billion), UniCredit’s acquisition of Commerzbank (USD 30 billion), and the USD 23 billion acquisition of SFR’s French telecommunications business by a consortium of Bouygues Telecom, Orange and iliad Group.

Globally, the largest transaction of the first half of 2026 was Paramount’s acquisition of Warner Bros. for USD 81 billion. This was followed by the merger of Devon Energy and Coterra Energy, valued at USD 58 billion. More than 20 transactions valued above USD 10 billion were announced worldwide during the period, marking the strongest mega-deal environment recorded in the history of the Ellex Raidla Transaction Radar.

The technology sector continued to be dominated by AI-driven transactions. SpaceX acquired xAI, creating a combined entity valued at approximately USD 1.25 trillion. OpenAI completed the largest private capital raise in history, securing USD 122 billion and reaching a valuation of USD 852 billion. Anthropic raised USD 30 billion in its Series G funding round, increasing its valuation to USD 380 billion.

Outlook: Conditions for Recovery Are in Place

According to Ellex Raidla, several key conditions for a recovery in dealmaking are already present. Interest rates are not historically high, significant amounts of capital remain available, private equity funds continue to hold substantial undeployed capital, and banks are prepared to finance transactions. Should existing geopolitical tensions ease without being replaced by new crises, deal activity could rebound relatively quickly. Europe’s growing number of mega-deals may also serve as an indicator of broader market recovery, as large transactions are often followed by secondary waves of activity within the same sectors.

In Estonia, defence and dual-use industries, healthcare, capability-driven technology acquisitions, and selective private equity investments are expected to remain the key drivers of M&A activity in the second half of the year. “During the first half of 2026, the Estonian Competition Authority received 14 merger control notifications, significantly fewer than the 24 notifications submitted during the same period in 2025,” noted Martin Mäesalu, Managing Partner at Ellex Raidla and a competition law expert.

The full market analysis is available HERE.

The Ellex Raidla Transaction Radar is a semi-annual overview of developments in the Estonian and global transactions market and has been published since 2020.