2025 TMT M&A Review: Trends, Growth, and 2026 Outlook
The 2025 M&A review for the technology, media, and telecommunications (TMT) sector highlights a mixed context, marked by growing uncertainty linked to trade tensions, political instability, and contradictory fiscal signals. This environment has made corporate decision-making more cautious and complex.
In France, this ecosystem represents a significant economic weight: telecom operators’ revenues exceeded €47B in 2024, while the digital sector—including IT services companies (ESN), software publishers and platforms, as well as engineering and technology consulting firms—reached €71.2B over the same period (CF NEWS/NUMEUM). On the French digital market, growth is estimated to slow compared to previous years, with +3% in 2025 and a gradual rebound expected in 2026 around +4% (XERFI/INSEE).
Revenue in programming, consulting, and other IT activities
(Year-over-year % change, Sources: XERFI / INSEE)
Despite the slowdown, investment dynamics remain active but are being reshaped. Organizations continue to see digital as strategic but are more selective, prioritizing AI and cybersecurity expenditures while deferring or resizing other IT projects (Xerfi).
Current Trends: Three Dynamics Structuring the TMT Sector
Beyond cyclical slowdown, 2025 highlights fundamental trends reshaping the TMT value chain:
- Industrialized solutions gain ground – demand favors cloud, software, and packaged solutions, with non-negotiable priorities such as AI and cybersecurity.
- Mature markets under price pressure – especially consumer telecoms, where usage grows but price competition intensifies.
- Media transformation – access to information shifts toward new entry points, making trust and traceability central to value creation (Numeum; Xerfi; Arcep; Bpifrance Le Hub – Trend’Up).
Tech: ESNs under pressure, cloud as a support, AI industrializing
The “digital services” segment shows mixed dynamics. ESNs, which represent nearly half of French digital revenue (€34.5B), are expected to decline by roughly 2% in 2025, with a gradual recovery in 2026 (Numeum). Meanwhile, the market is reorganizing via supplier consolidation, automation, and price pressure, with some firms favoring publisher solutions and packaged offerings over ESN services.
Cloud platforms and software publishers remain the main growth drivers, with ~+8.2% growth, fueled by migration to IaaS/PaaS and pricing adjustments. This growth reflects consumption adjustments rather than massive new investments, limiting spillover effects on the broader ecosystem (Numeum).
Generative AI emerges as a strategic and operational catalyst. About 48% of companies report working on GenAI projects (up from 29% in late 2023), but skill shortages and difficulty identifying high-value use cases remain major obstacles (HiTechPros / NUMEUM). Beyond experimentation, productivity gains attributed to GenAI are projected at 17% in 2026, potentially boosting margins and revenues through new offerings, faster delivery cycles, quicker RFP responses, and more personalized client solutions (Numeum / PAC Analyst).
HR also affects the trajectory of French digital: after ~7,000 job losses in 2024, workforce levels returned to 2022 levels (~666,000 employees). However, 36% of ESNs plan to reduce hiring in 2025, particularly for graduates and interns (Journal des entreprises / NUMEUM / HITECHPROS).
Media: From “zero-click” to “zero-question,” trust as an asset
In media, 2025 confirms a dual trend: resilient advertising activity but shifting value creation due to evolving consumption patterns. In the first nine months, the media ad market grew +2.1% vs 2024 (digital estimated for Q3; excluding mail media). Over two years, growth reached +11%, neutralizing the Paris 2024 Olympic effect (CB NEWS / France Pub, IREP, Kantar Media).
The year’s pattern reflects a base effect: after a +4.8% increase in H1 2025 vs H1 2024, Q3—impacted by the Olympics—showed a -3.2% decline year-on-year. Digital advertising grew ~+9% (+20% over two years), while traditional media fell -6.6% (-0.3% over two years) (CB NEWS).
Information access is increasingly “assistant-first,” shifting from “zero-click” to “zero-question,” where AI anticipates user needs. Success relies not just on capturing audience, but on trust and traceability, with labeling mechanisms enhancing distribution models and monetization, making credibility a key differentiator (Bpifrance Le Hub – Trend’Up).
Telecoms: Revenues under pressure, usage increasing, structural uncertainties
The French telecom sector remains a TMT pillar, with €47B revenue in 2024, >80% from retail (fixed/mobile telephony, internet). Competition is intense among the four major operators (Orange, Bouygues Telecom, SFR, Free) in a mature mobile market. In 2024, portability increased +21.8%, while widespread 5G adoption became a less differentiating commercial argument (XERFI).
Early 2025 data confirm continued pressure: retail revenue fell -0.5% in Q1 2025; mobile service revenue declined -2% amid lower prices and average SIM bills (XERFI / ARCEP).
Demand and usage continue to grow: internet subscriptions reached 32.8M (+1% YoY), fiber 26.3M (+2.7M, 80% of internet subscriptions), and 5G SIMs 30.2M (36% of active SIMs, +7.8M YoY). Data consumption hit 4.4 exabytes in Q3 2025 (+13%), averaging 18.7 GB/month (XERFI / ARCEP).
Investment obligations remain critical: fiber and 5G require massive capex; in February 2025, ARCEP sanctioned the four major operators for non-compliance with the New Deal Mobile in rural areas. The sector also seeks value in enterprise solutions (cloud, cybersecurity, private 5G networks, unified communications), while some markets, like Machine-to-Machine, shrink (-2.5% SIMs in 2024) amid competition from alternative technologies (XERFI / ARCEP).
Differentiation occurs through enriched offerings: in February 2025, Free and Bouygues integrated AI assistants into mobile plans, e.g., Bouygues offering unlimited Perplexity Pro searches for a year. Meanwhile, uncertainty about SFR’s future (Altice parent) fuels market restructuring scenarios (XERFI / CF NEWS).
Investor reaction: increased selectivity, “constrained” consolidation, premiums for differentiating assets
In 2025, investor behavior reflects global market turbulence: geopolitical and trade uncertainties, stricter client budget arbitrage, and a focus on resilience over growth-at-all-cost. Capital remains available but redeployed toward higher visibility, profitability, and sovereignty. M&A emphasizes consolidation to secure positions and absorb shocks (Forbes; Numeum; Xerfi).
Financially, ~€8B was raised through ~500 deals, mainly in H2 2025 (+55% vs H2 2024), with varying dynamics by stage (early stage +51%, growth +39%, late stage +49%). Notable deals illustrate a “quality/premium” logic:
- Esker: Bridgepoint & General Atlantic takeover at €262/share, valuing ~€1.621B (+30.1% premium), with 16.5% EBITDA margin.
- Softway Medical: Bpifrance capital injection valuing ~€1.2B, supporting growth in healthcare software (175M€ revenue, >1,300 clients, ~40% French market).
In telecoms, value creation also stems from financial restructuring: Altice France reduced debt from €24B to €15.5B through €8.6B debt write-offs, maintaining 55% control; total valuation ~€12.8B. Cross-border consolidation is illustrated by Terusus (Belgium, €15M revenue) merging with Portuguese Constructel/Visabeira, advised by Auris Finance.
In media, minority investments modernize and accelerate established assets: Merit France (Saadé family) acquired 20% of Pathé (~€hundreds M), supporting international expansion of a €977M revenue group in 2024.
Key growth levers and sector-specific constraints
In 2025, TMT dynamics involve deep value growth where possible, and financial discipline and consolidation in constrained segments. Winners convert constraints (budget scrutiny, price pressure, uncertainty) into strategic advantages (Numeum; Xerfi; Forbes).
Tech growth depends less on volume than on industrializing offerings with demonstrable ROI. Generative AI provides productivity gains (~12.5% in 2025, 17% in 2026), creating differentiation opportunities when packaged as sellable solutions. Execution challenges—skill shortages, prioritizing high-value use cases—remain key obstacles.
Telecom growth shifts from consumer “pipes” to monetizing high-value B2B services (cloud, cybersecurity, private 5G, secure data, unified communications). Investment constraints, e.g., slower FTTH connections (2.1M vs 2.9M in Q3 2024) and coverage obligations, remain structurally significant. Market consolidation discussions continue, including potential four-operator scenarios around SFR assets.
In media, 2025 emphasizes revenue quality: +2.1% growth Jan–Sep, concentrated in addressable digital segments, with traditional media down -6.6%. Trust, traceability, and brand safety increasingly convert constraints into competitive advantage (Bpifrance Le Hub; BUMP – France Pub / IREP / Kantar).
2026 Outlook: disciplined growth, consolidation, and sovereignty
By 2026, the most likely scenario is gradual, disciplined recovery, with consolidation accelerating strategic trajectories rather than serving as a cyclical effect.
Media: “Assistant-first” approaches will polarize value; winners secure trust, traceability, and distribution capacity to preserve monetization amid reconfigured advertising and intermediation (Bpifrance Le Hub; BUMP – France Pub / IREP / Kantar).
Tech: Progressive restart, AI moves from experimentation to generalization, productivity gains expected; value creation depends on converting gains into sellable offerings and margins rather than pressuring service prices (Numeum; Xerfi; KPMG; Bpifrance).
Telecoms: Core market constrained; B2B monetization and continued fiber/5G adoption are key drivers; potential consolidation (four-operator scenario) remains a focus (Arcep; Banque des Territoires; XERFI).
