Potential in the Swiss M&A market

The import tariffs imposed by the US have sent shock waves and caused major upheaval on the financial markets, negatively impacting sentiment in the M&A market. The M&A Outlook 2025 had been rated as positive by various players both internationally and in Switzerland. Since April 2025, uncertainty has continued to rise for the whole of 2025 due to ongoing geopolitical tensions and the unpredictable tariff policy of the US. At the same time, however, we see the current volatile environment as an opportunity for strategists and PEs with financial room for maneuver to exploit specific opportunities. Companies that can make targeted use of their financial flexibility stand to benefit particularly in an uncertain environment. In the second half of the year, this could well provide momentum for a selective revival of the M&A market.

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Key Takeaways

• The M&A Outlook 2025 is overshadowed by unpredictable US tariff policy, and uncertainty has increased further
• Strategists and PEs with financial room for maneuver are increasingly focusing on value-enhancing measures and can exploit opportunities in this environment
• Technology companies with stable cash flows and positive growth prospects – particularly in areas such as AI – are increasingly becoming targets for foreign investors
• 90% of the Swiss tech market consists of digital services providers and software companies, many of which are privately owned and under pressure due to corporate IT cost-cutting measures
• PEs have been very selective as tech investors in Switzerland to date, but are well positioned if seller and buyer expectations converge

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The decline in inflation and repeated interest rate cuts sparked positive momentum in the M&A market at the end of 2024. Compared to 2023, the global transaction value rose by 9% and the number of transactions by 1%. For Switzerland, we observed an almost unchanged number of transactions in 2024 compared to the previous year, supported by solid economic development. In Q1 2025, the number of transactions in the DACH region has now declined significantly, while deal values have increased. IFBC has had a good start to 2025 and, according to Mergermarket, ranks third in Switzerland in terms of Swiss M&A deal value and fifth in terms of number of transactions in Q1 2025.

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Due to the potential US tariff regime, the risks of an economic slowdown have increased and market uncertainty is high. Export-oriented industrial companies in Switzerland are feeling the strain of US import tariffs, the strong Swiss franc and challenges in procuring capital goods, all of which are weighing on their market position. Shrinking margins and the associated deterioration in creditworthiness are leading to financial challenges. In this environment, strategically positioned investors with solid financing are taking advantage of their room for maneuver by identifying target companies with foresight as part of their M&A strategy and actively engaging in dialog with them. Private equity firms (PE) have been robust so far and have repeatedly demonstrated that they are strategically positioned to capitalize on market opportunities with their available dry powder and longer investment horizons. At least in the second half of 2025, this could lead to a selective revival of the M&A market, subject to sellers' price expectations.

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The Technology Landscape in Switzerland

In Switzerland, M&A activity in the technology sector has been rather subdued in recent months, particularly in 2024. We have therefore conducted an in-depth analysis of this market to identify potential opportunities for focused buyers.

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Backed by major trends such as Cybersecurity, Cloud, SaaS, Data Analytics, and Artificial Intelligence, the Technology sector has proven internationally that it is robust even in difficult macroeconomic times. At the same time, the current environment, which also indirectly affects Swiss technology companies, is leading to a focus on companies that are benefiting from current trends and investing in new technologies. Traditional IT service providers are indirectly affected by negative developments among their customers, for example due to cost-cutting measures. Accordingly, these companies are focusing less on growth and more on consolidation and transformation. Here too, we continue to see buyers in the market in the DACH region.

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Against this backdrop, we consider the Swiss technology sector – especially the artificial intelligence environment in the areas of industry/application-specific software and cybersecurity software – to be very attractive for strategic and private equity investors. We continue to see many technology companies in Switzerland that are currently privately owned. PEs have also been very selective as tech investors in the Swiss market. Recently, we have observed increased interest in Swiss tech companies from the European environment. Accordingly, there should be renewed momentum in M&A activity in this sector on the buyer side in the foreseeable future.

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Digital services providers and software companies continue to account for just under 90% of the Swiss tech market. In addition to an attractive domestic market, stable cash flows and interesting growth prospects (also with a view to foreign markets) make these Swiss tech companies sought-after M&A targets. Advancing digitalization, scalable software solutions, increasing market consolidation driven by international investors, and the need for innovative technology solutions are driving transactions in this sector. This is often accompanied by an adjustment of the business model. We are currently observing companies from other industries that are regularly reviewing acquisitions in the technology sector. Based on all of this, we conclude that the tech sector could provide momentum in the second half of the year, provided that the expectations of sellers and buyers can be aligned in the reduced valuation environment in Europe.

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Private equity firms in Europe have also taken advantage of the opportunities presented by artificial intelligence and machine learning to strengthen their market position and benefit from the challenges of digital transformation.

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Switzerland also offers interesting opportunities in the field of artificial intelligence, which strengthens our expectations for 2025.

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Conclusion
The M&A Outlook for 2025 is overshadowed by US tariff policy. Due to ongoing geopolitical tensions, fragile trade relations with the US, and the resulting outlook for the real economy, we expect more uncertainty in the M&A market in the short-term in 2025. However, there are also signs of potential positive impulses for the second half of the year. For example, many private equity firms are well positioned to take advantage of opportunities and still have a lot of dry powder at their disposal. In addition, carve-outs and spin-offs aimed at optimizing operations in this environment are likely to provide momentum. Driven by digitalization and new possibilities offered by artificial intelligence, opportunities may also increase in the Technology sector – particularly in the Swiss market, which is characterized by many privately held companies and is attracting interest from foreign investors. The focus will be on companies that enable the use of new technologies. However, it remains to be seen whether the recent valuation correction in Europe will help bridge the gap between sellers' and buyers' price expectations.