Increase in domestic mergers and acquisitions boosts Ukraine’s M&A activity in early 2025

Merger and acquisition (M&A) activity in Ukraine saw a significant increase in the first six months of 2025, fueled by a surge in domestic deals while foreign investment declined. A report by KPMG Ukraine revealed that there were 34 announced deals totaling $716 million, a 21% increase from the same period in 2024. Of these, 25 deals were domestic transactions amounting to $367 million.

One of the primary factors contributing to the uptick in domestic M&A activity was Kyivstar’s acquisition of Uklon, a delivery and ride-sharing app, worth $155 million. Ukrainian companies also increased their investments overseas, with notable acquisitions such as MHP’s purchase of a 92% stake in Spanish poultry producer Uvesa for over 270 million euros.

The rise in M&A deals within Ukraine coincides with the country’s ongoing conflict with Russia and the challenges of uncertainty and labor shortages. Many Ukrainian companies are cautious about taking on significant debt to fund M&A activities, leading to a “wait and see” approach, according to Roman Waschuk, Ukraine’s business Ombudsman.

The persistence of capital controls imposed by the Central Bank of Ukraine, introduced during the war, may also be a contributing factor to the increase in domestic deals. Companies facing restrictions on exporting dividends or earnings are reinvesting their profits within Ukraine instead of abroad.

While domestic and outbound M&A activities showed growth, inbound investment in Ukraine experienced a sharp decline, with only four transactions in the first half of the year amounting to $20 million. Factors such as infrastructure risks, investor caution, and capital controls are cited as reasons for the subdued influx of foreign capital.

The sectors driving M&A activity in Ukraine in 2025 were agriculture, technology, and real estate. Agriculture accounted for nearly 50% of total deal value, with MHP making strategic acquisitions in the grain infrastructure sector. The technology sector, led by Kyivstar’s acquisitions in the online health platform industry, experienced a decline in value compared to the previous year. Real estate and construction also saw an increase in activity, with notable transactions like the purchase of Obolon Golf Club by Kyiv School of Economics.

However, KPMG warned that the reported M&A activity may not reflect the full extent of deals happening, as many transactions do not disclose their values. Furthermore, deals between Ukrainian-owned companies registered abroad may not be categorized as involving Ukrainian firms, making it challenging to accurately assess year-to-year trends in the M&A landscape.

In conclusion, while domestic M&A activity in Ukraine is on the rise, challenges such as limited foreign investment and undisclosed transactions pose potential obstacles to fully understanding the country’s evolving business landscape.