As we near the conclusion of the first quarter of 2025, it is clear that the Greek corporate landscape and M&A market are undergoing significant changes influenced by a variety of economic, regulatory, and social factors. While the M&A sector experienced steady activity over the past two years, its overall momentum was relatively muted, primarily due to geopolitical tensions, social dynamics, and inflationary pressures. However, a much-anticipated increase in traction appears to be on the horizon, making a comprehensive understanding of the current trends and challenges within the market crucial to effectively navigate and track this evolving environment.
In terms of economic recovery and growth prospects, Greece is actively emerging from years of economic turbulence, supported by a revival in tourism and an increase in foreign investments. Projections for 2025 suggest that Greece’s GDP growth is expected to stabilize between 3-4%, bolstered by ongoing reforms, EU funding, and a more favorable investment landscape. Businesses, on their end, are increasingly emphasizing digital transformation, with a strong focus on ESG initiatives and sustainability to enhance their competitive advantage.
It is now clear that ESG considerations are playing an increasingly significant role in shaping corporate strategies and M&A decisions in Greece, with the majority of transactions being assessed through an ESG lens. Companies prioritizing sustainability and social responsibility are likely to attract greater interest from investors, and those with robust ESG profiles can achieve higher valuations in the market. Stakeholders are placing a stronger emphasis on sustainable practices, and businesses are acknowledging the necessity of incorporating ESG criteria into their operating models – a transformation that is driven by both evolving consumer demands and regulatory requirements. The tourism sector, a crucial part of the Greek economy, has seen strong recovery following the pandemic – a resurgence that benefits not only the hospitality industry but also stimulates related sectors such as real estate and local services. This positive outlook is attracting both domestic and foreign investors who are eager to capitalize on growth opportunities in these sectors.
Another notable trend in the Greek M&A market is the growing interest in technology and innovation. The government’s efforts to promote a digital economy, along with EU funding initiatives, have spurred investments in tech start-ups and digital transformation across various industries. Sectors such as fintech, e-commerce, and renewable energy are experiencing particularly robust growth, making them appealing targets for M&A activity. Recently, the Greek market has seen established companies either increasingly acquiring tech start-ups or merging with one another to integrate innovative solutions, enrich their offerings, and strengthen their market position, mirroring thus a broader global movement that acknowledges the critical need of staying competitive in an ever-evolving digital landscape. Regarding foreign direct investment (FDI), Greece is experiencing an increase in cross-border M&A activities as the economy continues to stabilize. Investors from nations such as the United States, China, and various Gulf countries are particularly active, seeking to acquire stakes in promising Greek companies. The energy sector, particularly renewable energy initiatives, has emerged as a key area for international investment, fueled by the EU’s green agenda and Greece’s commitment to reducing its carbon footprint.
Despite the positive developments, the Greek corporate and M&A market faces several challenges primarily attributed to regulatory complexities and bureaucratic obstacles. Although the government has made efforts to streamline business operations and draw in investment, persistent issues such as a patchwork of fragmented legislation – encompassing competition, labor, tax, and corporate governance regulations – through which companies must navigate to effectively carry out transactions continue to hinder progress. In light of recent legislative developments, the Greek Parliament has passed Law 5162/2024 in an effort to bolster economic resilience through the provision of enhanced tax incentives, particularly for legal entities and corporate transformations. This law includes provisions aimed at enhancing existing tax incentives and introducing new ones for Research and Development (R&D), promoting innovation, and supporting start-up businesses, as well as reforming the regulations governing business transformations.
As the country experiences economic recovery alongside a surge in foreign investment and an increasing emphasis on technology and sustainability, the corporate market emerges in 2025 as a dynamic landscape filled with both significant opportunities and substantial challenges, in which companies find themselves presented with a multitude of avenues for growth that could reshape the industry. However, to truly capitalize on these promising opportunities, stakeholders must skillfully navigate the intricate regulatory complexities that characterize the market and effectively address any skills shortages that threaten to hinder progress.
By Mika Lalaouni, Partner, and Mariliza Kyparissi, Of Counsel, Drakopoulous
This article was originally published in Issue 12.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
