Stelios Demetriou: Cyprus ready for new M&As – A snapshot of the CESA region

Cyprus is well-positioned for further mergers and acquisitions (M&A) across the financial sector, technology (particularly gaming), healthcare, and education, according to Stelios Demetriou, Partner and Head of Strategy and Transactions at EY Cyprus.

Since last September, Demetriou has been serving as the Head of M&A for Central, Eastern, and Southeastern Europe, as well as Central Asia (CESA) at EY.

“We are observing increased activity across multiple sectors, from financial services to healthcare, real estate, and technology,” Demetriou said referring to Cyprus in an interview with InBusinessNews. He also provided an overview of M&A trends in Greece, Poland, the Czech Republic, Romania, and other CESA countries. As he said, in 2024, EY advised on M&A deals exceeding $6 billion in transaction value across the region.

He highlighted two key trends shaping investment decisions: the energy transition and the integration of advanced technologies. Companies are focusing on business transformation to maintain competitiveness, with M&A strategies serving as a crucial accelerator, Demetriou said.

What are your key responsibilities as Head of Mergers and Acquisitions (M&A) for Central, Eastern, and Southeastern Europe and Central Asia (CESA), and how significant is your role—as well as EY’s— in executing such large deals?

Since September 2024, I have held the position of Head of M&A at EY for Central, Eastern, and Southeastern Europe, as well as Central Asia (CESA), overseeing operations across 29 countries.

EY’s Mergers & Acquisitions (M&A) team operates as an interconnected unit at a regional level. This approach allows us to provide superior client service; efficiently identify the right investment opportunities and investors for each unique case; ensure the successful completion of transactions; and handle larger and more complex deals.

My goal is to strengthen the connectivity of this team, which consists of over 120 highly specialised M&A professionals across the region, by facilitating information exchange on investment opportunities and fostering greater collaboration, both within the CESA region and with other areas such as Western Europe and the Middle East.

EY’s global network spans multiple geographies and industries. Our approach is centred on delivering exceptional professional services to our clients by combining local market presence, global connectivity, and deep sector expertise.

My vision for the CESA region is to further strengthen our collaborative efforts, ensuring that our professionals are well-equipped to identify and capitalise on emerging investment opportunities.

This role is not only a challenge but also a rewarding experience for me as a professional and for EY as a firm.

In 2024, we acted as M&A advisors on transactions across the CESA region, with a total deal value exceeding $6 billion. This achievement earned us multiple awards, including M&A Accountancy Firm of the Year (Europe) at the Mergermarket Awards.

Our role in these transactions was crucial, reinforcing our global footprint and seamless approach to mergers and acquisitions. By leveraging our industry expertise, we helped clients navigate the complexities of the M&A landscape and successfully complete their transactions.

Which sectors and geographies are showing strong M&A momentum?

Over the past year, M&A activity in the CESA region has significantly increased. Despite ongoing geopolitical tensions and regional uncertainties, there are still valuable investment opportunities to be leveraged.

This surge in activity is driven not only by declining interest rates but also by key industry trends that are increasingly influencing investment decisions. Notable among these trends are the energy transition and the adoption of cutting-edge technologies, such as artificial intelligence (AI).

Companies are seeking to transform their business models to stay competitive, leveraging mergers and acquisitions—among other strategies—as an accelerator for growth.

Technology has been a key driver of M&A activity in the region, further supported by the consumer and energy sectors, as well as utilities and healthcare.

Looking at specific countries, Poland stands out as particularly attractive to investors, especially in technology and energy. The Czech Republic follows a similar trend, with additional interest in energy, utilities, and industrial sectors. Greece is among the most appealing markets in the CESA region, showing strong activity not only in energy but also in real estate, hospitality, and consumer goods. Romania remains highly active in M&A, with transactions spanning technology, energy, utilities, real estate, consumer goods, and healthcare.

Countries like Hungary and Serbia present a slightly different outlook, with their activity primarily concentrated in infrastructure projects. Hungary has also attracted interest in financial services and chemical industries. In the Baltic states, technology dominates M&A activity, reflecting the region's innovation-driven investment landscape.

In Cyprus, we are observing increased deal-making across multiple sectors, including financial services, healthcare, real estate, and technology.

The country is well-positioned for further M&A growth due to its strategic location, skilled workforce, and expanding economy—a fact reinforced by continuous credit rating upgrades from international agencies.

Are we currently experiencing a boom in mergers and acquisitions? What are the forecasts for the coming years, particularly in the regions you oversee?

The need for transformation to maintain competitiveness is pushing companies to place M&A at the top of their strategic agenda.

According to EY’s CEO Outlook Survey, published in January 2025, M&A is expected to remain a top priority for CEOs, serving as a fundamental driver of business transformation and growth.

With borrowing costs remaining lower than in the past two years, 2025 is expected to be a highly active year for M&A. Private equity firms, in particular, are increasingly looking to optimise and rebalance their portfolios in line with their strategic goals.

Additionally, the broader region is set to benefit from a growing trend of companies expanding into neighbouring markets to ensure operational stability—an outcome of disruptions in global supply chains caused by the pandemic and geopolitical conflicts.

Companies are actively working to diversify and secure their supply chains closer to home, prioritising countries with skilled labour, competitive costs, and strong infrastructure.

This trend was also highlighted in the recent EY European Attractiveness Survey, which identified rising interest in foreign direct investment (FDI) linked to supply chain resilience.

Looking at sector dynamics, technology, energy, consumer industries, and healthcare are expected to continue driving M&A activity across the region.

Technology and renewable energy will remain at the forefront in Central Europe, with Poland and the Czech Republic leading the way. Industrial growth is also gaining momentum in these countries.

Bulgaria, Romania, and Serbia are likely to see increased opportunities in green energy and infrastructure.

Greece is set to remain highly active in real estate and financial services, reinforcing its position as one of the most attractive markets in the CESA region. This trend is expected to continue, driving further growth across all major economic sectors.

The Baltic states are expected to continue attracting investment in technology, reinforcing their role as a hub for digital innovation.

In Central Asia, where geopolitical factors play a key role, growth is anticipated in banking, mining, and real estate.

Cyprus is well-positioned for further M&A activity, particularly in financial services, technology (especially gaming), healthcare and education.

With a strong track record of transactions in recent years, Cyprus is expected to see even greater M&A activity moving forward, solidifying its position as an attractive market for investors.

Continued M&A Growth in Cyprus

Having experienced a wave of transactions in recent years, we anticipate even greater M&A activity in the coming year, with the previously mentioned key sectors leading growth.

However, it is essential to recognise that Cyprus' geopolitical position, along with other economic factors, will make local businesses increasingly attractive to international and regional investors—a trend we have already witnessed.

Overall, most sectors are expected to experience significant M&A activity, driven by global trends and geopolitical developments.