The political turmoil in France is affecting the country’s economic dynamism. Since the dissolution of the National Assembly, business leaders and investors have become more cautious. As a result, the number of mergers and acquisitions (M&A) involving French companies is declining. Experts from AURIS Finance provide their analysis.
M&A Activity Among French Companies Plummets
Mergers between French companies are in free fall. This observation—reported in Le Figaro in early October—is clearly reflected in the numbers. In 2024, according to data from consulting firm PwC, the number of M&A transactions in France fell by 29% year-on-year. The decline continued in 2025: in the first quarter, M&A transactions involving a French entity also dropped by 24%, totaling $29.6 billion.
A French Exception
Although overall transaction values remain stable, France’s situation contrasts with the broader European dynamism. According to PitchBook data cited by Euronews, in the first half of 2025, the total value of transactions in Europe reached $2 trillion, up 13.6% year-on-year. A total of 24,793 deals were recorded, an increase of 16.2% compared to the first half of 2024. The main cause: ongoing political instability. Over the past two years, France has seen five different prime ministers. With a Parliament lacking a clear majority, uncertainty dominates, prompting executives to act cautiously. According to Bpifrance Le Lab’s survey, in Q2 2025, “political and economic uncertainty” was among the top concerns for SMEs, slowing down investment plans: now, less than half of executives surveyed (45%) plan to invest in 2025.
Instability Encourages Inaction
The current situation offers little hope for improvement. Budget discussions are not reassuring to economic actors. While executives can accommodate a temporary increase in taxation, they struggle to cope with chronic instability. Tax hikes, labor reforms, or interest rate changes can be integrated into a strategy; but persistent uncertainty, policy reversals, and a lack of economic visibility discourage medium-term risk-taking. For investors and company leaders alike, this caution translates into financial trade-offs. Buyers focus on the most reasonable synergies and avoid medium-sized acquisitions. According to PwC, the average deal size increased significantly—up 11% in 2024 to $146 million—reflecting greater selectivity: only transactions with high strategic value are pursued.
Our Experts by Your Side
During this period of uncertainty, smaller companies struggle to secure financing. Both executives and investors are adopting a wait-and-see approach. In 2025, the reluctance of Anglo-Saxon investment funds toward French companies increased. France has become less attractive to American and British investors, who prefer to postpone or cancel transactions, particularly in strategic sectors or M&A. Nevertheless, some companies are still able to stand out—innovative companies and those already well-established in their markets, for example.
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