M&A Deal Activity: New Strategies, Emerging Challenges and Growing Opportunities

Despite global economic headwinds, 2024 has marked a stable level of mergers and acquisitions (M&A) activity in Latvia. In fact, this year stands out in terms of deal volume, with 57 publicly announced transactions—the highest ever recorded in Latvia, reflecting a 78% increase compared to the previous year.

At the regional level, the Baltic States saw 231 M&A deals valued over EUR 5 million, bringing total deal value to EUR 2.1 billion—a 76% increase year-on-year. Lithuania continues to lead the region with 41% of all deals, followed by Estonia with 34% and Latvia with 25%. While Latvia lags behind its neighbours in absolute volume, investor activity continues to increase moderately, signalling a stable market trajectory. Importantly, Latvia retains growth potential, while Estonia faces a higher risk of economic recession.

M&A Activity in Latvia and the Baltics

Although the global economy in 2024 has remained turbulent—marked by geopolitical instability, ongoing conflicts in Ukraine and the Middle East, and slower-than-expected interest rate stabilisation—investor confidence in the Baltics has persisted. Seven deals in the Baltics exceeded the EUR 100 million mark this year, double the amount in 2023. The region’s largest deal was the acquisition of Tallink Grupp shares by Infortar from Citigroup Venture Capital for EUR 670 million. In Latvia, the largest publicly disclosed transaction was Latvenergo’s acquisition of wind farms in Lithuania from Estonia’s OU Utilitas for EUR 200 million.

Another key Latvian deal in 2024, although the value was not disclosed, was the merger of two Latvian-born tech companies, Printful and Printify (through their US-based holding companies). Other notable transactions include Elagro Trade’s sale to Lithuania’s agricultural group Akola for EUR 22 million, and the exit of Chinese investors from Stenders, with their controlling interest sold to US private equity firm L Catterton for EUR 14 million.

Growing Interest from International Investors

Most active investors came from the Baltic region, as well as Germany, Finland, the UK, and Sweden. A key deal included Germany’s H&J Brueggen acquiring a 50% stake in Riga-based grain processing company Rigas Dzirnavnieks. Finnish investors completed three deals, including Lightspace Technologies’ partnership with Finnish defence company Summa Defence. UK investors were involved in three deals, while Swedish investors participated in six, mainly within the solar energy sector.

Latvian companies have also become increasingly acquisitive abroad, reaching beyond the Baltics. Balticovo acquired 100% of Estonian firm Tõhela Agro, and Digital Mind acquired Polish tech company EIP Dynamics. SIXT Baltics (Transporent SIA) expanded in Finland by acquiring Veho Rent Oy Ab. This trend reflects a growing appetite among Latvian businesses to use M&A as a strategic tool for international expansion.

In context, while M&A volume across Europe declined by 8% in the past year, the total deal value rose to EUR 439 billion in the first half of 2024, a 31% increase year-on-year.

Key Sectors Driving M&A Activity in Latvia

Technology, Media & Telecommunications (TMT)
TMT has traditionally been one of the most active M&A sectors in the Baltics, but its share in 2024 declined. While TMT accounted for 25% of all deals in 2022, this figure dropped to 12% in 2024, indicating a relative slowdown. Still, foreign investors remain highly interested in early-stage tech ventures—particularly in fintech, SaaS, and e-commerce. Latvian tech startups continue to gain international attention, especially in AI, FinTech, and cybersecurity. Local testing of 5G and 6G technologies is also progressing, with firms strengthening their foothold in innovation.

For instance, Latvia-based Aerones, which develops automated solutions for wind turbine maintenance, raised EUR 28 million from international investors including Future Positive Capital (France). The Latvian government continues to support innovation and startups, helping local firms expand globally with high value-added tech. Trends suggest that Latvian companies are increasingly using innovation and tech development as a driver for international presence.

Energy & Renewables
The energy and renewables sector has become strategically critical in the Baltics. Countries in the region are committed to diversifying their energy supply and reducing external dependency. Latvia’s energy sector is undergoing transformation, including Latvijas Gāze buying back stakes previously held by Russia’s Gazprom. Although the rapid growth seen in 2021-2022 has stabilised, development in this sector continues, fuelled by EU and private investments. Solar and wind projects remain highly attractive, and deeper regional cooperation is helping drive sustainable energy solutions.

Financial Services & FinTech
M&A activity is also accelerating in financial services and FinTech. Local banks and startups are consolidating—for instance, Signet Bank acquired LPB Bank. Pension fund manager Indexo successfully carried out an IPO, raising EUR 7.5 million, followed by an additional EUR 9 million in December. Looking ahead, Latvian FinTech firms are expected to advance innovations in AI and digital identity and payment solutions.

Transport & Logistics
The upcoming AirBaltic IPO is among the most anticipated deals in 2025, poised to attract major investment and strengthen the airline’s position in the regional market. Port development and rail infrastructure projects also continue to enhance Latvia’s role as a key link between Europe and Asia.

Outlook for 2025

M&A activity in 2025 is likely to be driven by digitalisation, distressed asset opportunities, and growing foreign investor interest. A decline in interest rates will make financing more accessible, encouraging more ambitious acquisitions. FinTech consolidation across Europe is expected to intensify, as digitalisation and regulatory changes push smaller firms to seek partners or merge. Latvia is well-positioned to become a regional leader, backed by favourable regulatory initiatives that promote innovation in financial services.

Artificial intelligence and digital identity solutions will gain importance, driving investment in payment services and open banking. Renewable energy is expected to attract continued international investment, supported by EU programmes encouraging funding in defence and security-related industries. Latvia’s government plans to develop its defence sector, potentially creating new investment projects and even state-owned enterprises to strengthen local production capacity.

While the Latvian and Baltic M&A markets remain exposed to global economic shifts, Latvia has proven to be resilient, offering investors a stable and predictable environment. Economic forecasts point to gradual recovery, which could fuel a new wave of deal-making in 2025.

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