"Cyprus’ M&A performance is determined by the small size of our economy, where even a couple of larger transactions, like the recent deals in the banking and insurance sectors, can entirely change deal activity indicators," Christophoros Anayiotos, the Head of Deal Advisory, KPMG in Cyprus proposes.
Speaking to GOLD magazine about the mergers and acquisitions trend that shaped last year, the expert elaborates, "2025 was quite active in Cyprus across many sectors, the main drivers being similar to the international trend: a consolidation of markets and growth opportunities. Moreover, several corporate deals completed in Cyprus can also be related to family-owned businesses whose eventual evolution was an exit by the family and original shareholders."
Among other things, Anayiotos also talks about how deal flow and valuations were impacted by international events in 2025 and how Cyprus responded to global M&A trends.
In addition, shares his opinion on which sectors in Cyprus emerged as the most active or attractive for transactions and which are anticipated to attract attention going forward, while also explained when M&A makes strategic sense for Cypriot businesses.
2025 was defined by geopolitical conflict, shifting trade policy and market volatility. How did these forces affect deal flow and valuations on the global stage?
As peace, regrettably, hasn’t been attained in major conflicts for more than a couple of years now, the dealmakers seem to have adapted to this new ‘rule of uncertainty’. Global M&A activity has shown resilience, recovering from its original shocks, as companies, investors and funds are now living with what we may call “structural uncertainty.” In the aftermath of the original shock and fear of wider international conflicts – or even a world war – corporates and investors are trying to address uncertainty by consolidating their position. Different reactions have been witnessed as some companies or even entire sectors have been growing through acquisition, while others have focused on core activities through divestitures or by revisiting their geographical strategies. For some, this denoted expansion for the diversification of risks while, for others, it was risk management by focusing on core locations.
Did Cyprus largely track global M&A trends in 2025 or did local conditions, such as regulation and market depth, drive a different outcome?
Cyprus’ M&A performance is determined by the small size of our economy, where even a couple of larger transactions, like the recent deals in the banking and insurance sectors, can entirely change deal activity indicators. 2025 was quite active in Cyprus across many sectors, the main drivers being similar to the international trend: a consolidation of markets and growth opportunities. Moreover, several corporate deals completed in Cyprus can also be related to family-owned businesses whose eventual evolution was an exit by the family and original shareholders.
Which sectors and/or segments in Cyprus emerged as the most active or attractive for transactions and which, if any, look most promising going forward?
Evidently, the most active sector by value was financial services, recording several high-value transactions involving banks and insurance companies with deals being initiated or completed in 2025. In terms of deals by volume, the largest share is attributed to the ICT sector, with most of the deals being cross-border and involving software developers, games studios, etc. Other sectors with notable activity included renewable energy generation and retail, both of which witnessed takeovers by larger corporates engaging in growth strategies, aiming to achieve cost synergies or grow their product offerings.
In today’s environment, when does M&A make strategic sense for Cypriot businesses and what benefits does it offer?
For most sectors, M&A may be a survival strategy. In highly competitive markets, margins shrink and companies are obliged to look for synergies, diversification or the use of technology not only to grow but, in many cases, to remain viable. Often, none of these may be achieved internally and companies have to acquire innovation by investing in tech companies or in talent-rich organisations to accelerate their capabilities and optimise or disrupt their operating models. Another M&A driver, specific to smaller economies like Cyprus, is the structure of the business environment, mainly characterised by family businesses’ ownership and management. We see increasingly more family businesses targeting a successful succession through partial or full exits – we expect this to continue. Moreover, difficulty in accessing finance is becoming a more popular reason for considering private equity or, nowadays, private credit options, despite this being only in its infancy in Cyprus.
Do you expect 2026 to resemble the dynamics of 2025 or is the market entering a different phase? If so, what will be the key drivers of that shift?
I expect all the above trends and rationale for transactions, as well as the accumulated liquidity, to continue to fuel an appetite for M&A. At the same time, given the aforementioned “structural uncertainty,” such deals will be subject to increasingly more elaborate, data-driven scrutiny before committing and completing a transaction. Specifically for Cyprus, it is also encouraging to see that we are progressively becoming more visible to international investors, both corporate and financial, driven by factors including our geographical location, niche performance in certain sectors and a growing market size that makes sense even for larger players to consider Cyprus in their international growth plans.
This interview first appeared in the January edition of GOLD magazine. Click here to view it.
