Rise in domestic deals boosts Ukraine’s M&A activity in early 2025, report finds

Merger and acquisition activity ramped up in the first half of 2025, driven by a rise in deals between Ukrainian companies, according to a recent report by accounting firm KPMG Ukraine.

Analysis by KPMG recorded 34 announced deals worth $716 million in total, a 21% increase in value compared to the same period in 2024. Of these, 25 were domestic mergers or acquisitions, collectively worth $367 million.

One of the key drivers of the uptick in domestic M&A activity was telecoms giant Kyivstar’s $155 million acquisition of Uklon, a delivery and ride-sharing app.

Ukrainian investment overseas also increased, more than tripling to $329 million. This was largely due to a single high-value transaction: agritech and food group MHP’s acquisition of a 92% stake in Spanish poultry producer Uvesa, in a deal worth more than 270 million euros ($312 million).

The rise in reported M&A deals comes as Ukraine enters its fourth year of combatting Russia’s full-scale invasion and grapples with continued uncertainty and rising labor shortages.

"Many Ukrainian companies are in ‘wait and see mode’ and are reluctant to become heavily indebted — which is usually how mergers and acquisitions are funded," Roman Waschuk, Ukraine’s business Ombudsman, told the Kyiv Independent.

One factor behind the increase in domestic deals may be the persistent capital controls imposed by Ukraine's Central Bank. Introduced on the first day of the war to prevent a currency crisis, these restrictions have been slow to ease.

"Companies that cannot export their dividends or other earnings to owners outside of the country instead reinvest it in Ukraine," said Roman Waschuk, Ukraine’s business ombudsman.

While domestic and outbound deal-making gained momentum, inbound investment into Ukraine declined sharply. Only four inbound transactions were agreed in the first half of the year. The total value of these deals slumped to $20 million, compared with $390 million a year earlier — a figure buoyed by two large deals worth $320 million.

KPMG cites infrastructure risks and heightened investor caution as key reasons for the subdued inflow of foreign capital. Capital controls are also likely partly responsible for weaker foreign investment, as investors are unable to freely repatriate profits — a major deterrent.

Some relief may come from the growing availability of war risk insurance. Several new initiatives, launched by both private insurers and international institution, have come to fruition in early 2025. Their impact could become clearer — if companies know that they exist.

"Access to war insurance has improved over the last year,” Waschuk added, "yet there seems to be a lack of awareness."

A further catalyst could come from Washington DC. "If this U.S. resource fund ever gets up and running, that might start to change things in terms of incoming flows," Waschuk said.

Which sectors saw the most activity?

Of the deals recorded by KPMG, agriculture, tech and real estate were the main drivers of M&A activity in the first months of the year.

Ukraine’s agricultural sector remained a key pillar of the market, accounting for nearly 50% of the total deal value and 21% of deal volume in the first half of 2025. In addition to the high-profile Uvesa transaction, MHP strengthened its position in regional grain infrastructure with a $14.3 million acquisition of Toni d.o.o, a Croatian wholesaler of agricultural products.

The tech sector, while representing 26% of all M&A transactions by volume, saw a decline in value to $221 million, down from $325 million in the first half of 2024.

Kyivstar played a central role in the sector’s activity. In addition to the Uklon deal, it acquired stakes in online health platform, Helsi. The telecoms giant is also looking to buy another online health platform, Tabletki.ua, but has been rejected twice by Ukraine's anti-trust regulator over fears Kyivstar will corner the digital health market. Kyivstar recently applied a third time to the regulator to consider the deal.

The real estate and construction sector also experienced growth, with seven deals worth $95 million, up from five deals totaling $40 million in the first half of 2024. A notable transaction was Kyiv School of Economics’ $18 million purchase of the Obolon Golf Club.

KPMG cautioned, however, that the true scale of M&A activity may be underreported. Only half of all known M&A deals since 2013 have disclosed transaction values.

Additionally, deals between Ukrainian-owned companies registered abroad — a common corporate structure — may not be classified as involving Ukrainian firms. This makes it difficult to draw conclusions from year-to-year fluctuations.

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The Kyiv IndependentMartin Fornusek