Battle-Tested Investments: How the War Has Reshaped the Rules of M&A in Ukraine

At the outset of Russia's full-scale invasion, many foreign investors expected Ukraine to become a distressed market, where business owners would be eager to dispose of assets at significant discounts.

Instead, the opposite happened. High-quality businesses retained their value and became scarce assets capable of setting the terms of negotiations.

In partnership with Forbes Ukraine, Aequo analysed Ukraine's mergers and acquisitions market and found that, despite the gradual pace of economic recovery, dealmaking continues to gain momentum.

According to the research, the total value of M&A transactions reached USD 1.7 billion in 2025, while USD 1 billion worth of deals was announced during the first five months of 2026 alone.

"The key question for investors is no longer 'How can we buy at a lower price?' It is 'What will make this transaction viable?'" – Anna Babych, Executive Partner, Aequo

A Market That Has Proven Its Resilience

Who is acquiring Ukrainian assets today? Which companies are attracting investors? And how are businesses being valued amid wartime uncertainty? These questions are explored in this article based on research conducted by Forbes Ukraine in partnership with Aequo.

Ukraine's real GDP contracted by 28.8% in 2022 following the outbreak of the full-scale invasion. Since then, however, the economy has gradually recovered. GDP expanded by 5.5% in 2023, 3.2% in 2024 and 1.8% in 2025. According to current forecasts, the economy is expected to grow by another 1.5% in 2026, bringing nominal GDP to approximately USD 227 billion.

Against this backdrop, the country's M&A market has rebounded even more rapidly. In 2025, total deal value increased by 50%, reaching USD 1.7 billion, while the number of transactions rose from 37 to 41. During the first five months of 2026, announced deal value had already reached USD 1 billion, equivalent to nearly 60% of the previous year's total.

The market's renewed momentum has been driven by more than macroeconomic recovery alone. One of the key catalysts has been the foreign exchange restrictions introduced by the National Bank of Ukraine in February 2022. The prohibition on purchasing foreign currency for dividend distributions to foreign shareholders resulted in substantial hryvnia liquidity accumulating on the balance sheets of major Ukrainian companies, creating strong incentives to reinvest that capital domestically.

Kyivstar offers a compelling example. Over the past three years, the company's cash reserves have increased twelvefold to UAH 20 billion, exceeding half of its annual revenue. This financial capacity enabled Kyivstar to pursue a series of landmark acquisitions.

Domestic Capital Takes the Lead

One of the defining trends of 2025 has been the growing dominance of domestic transactions. While local deals accounted for 40% of all M&A transactions in 2024, their share increased to 55% in 2025.

The largest domestic transaction of the year was Kyivstar's acquisition of the online medicine search and booking platform Tabletki.ua for USD 160 million. By comparison, the largest domestic deal completed a year earlier — the acquisition of Hotel Ukraina — was valued at USD 59.5 million.

The year's largest M&A transaction overall, however, reflected the international expansion of Ukrainian business. Agricultural holding MHP acquired more than 92% of the share capital of Spain's Grupo Uvesa, one of the country's leading poultry and pork producers, in a transaction valued at USD 300 million.

The trend continued into 2026. During the first five months of the year, MHP announced the acquisition of Greek poultry producer Th. Nitsiakos AVEE, with the deal estimated at USD 290–330 million.

Foreign investors have also become increasingly active, although their role has evolved. In 2024, the largest transaction involving foreign capital was also the biggest deal of the year. In 2025, however, the largest foreign investment — the acquisition by Bunge of an 85% stake in the Vinnytsia Oil and Fat Plant for USD 138 million — was smaller than the largest transactions completed by Ukrainian companies.

This shift reflects a changing balance in the market: the pace of Ukraine's M&A activity is now increasingly being driven by domestic strategic capital.

Where Investment Is Flowing

Almost one in every three M&A transactions was concentrated in the agriculture sector, which accounted for 31% of the market by value. Technology followed with 22%, real estate with 19%, and manufacturing with 16%.

This trend became even more pronounced in 2026. During the first five months of the year, the combined share of agribusiness and technology transactions increased to 64%, cementing agriculture's position as the primary growth engine of Ukraine's M&A market.

At the same time, the market remains highly concentrated. In 2025, just five transactions accounted for 51% of total deal value. During the first five months of 2026, almost half of the market (47%) was generated by only two deals.

At the other end of the spectrum, activity is also accelerating in transactions valued at up to USD 5 million. This segment is expanding particularly rapidly in the defence sector. While only a handful of such transactions were completed in 2024, their number increased to dozens in 2025.

A New Dealmaking Logic

According to Aequo's M&A experts, the success of a transaction increasingly depends on how it is structured.

"Negotiations increasingly focus on whether a transaction can be structured in a way that works for both parties. More often than not, the winning bidder is not the one offering the highest valuation, but the one presenting the most credible path to closing the deal within a reasonable timeframe", – Anna Babych, Executive Partner, Aequo

The approach to risk assessment has evolved as well. Traditionally, legal due diligence focused on historical issues that could justify a reduction in the purchase price. Today, the emphasis has shifted towards a company's ability to operate successfully under prolonged uncertainty.

Power outages, mobilisation, supply chain disruptions and regulatory changes are no longer viewed as exceptional risks. They have become part of the operating environment and are assessed as integral elements of a company's resilience when determining valuation and transaction structure.

Expectations of prospective buyers have also become considerably more stringent. The origin of funds, ownership structures and sanctions exposure are now examined before substantive negotiations even begin. Companies increasingly require bidders to disclose their ownership chain up to the ultimate beneficial owner at the outset, avoiding time spent on transactions that are unlikely ever to reach completion.

"Paradoxically, investors who take a more pragmatic view of Ukrainian risk are now gaining access to some of the highest-quality assets available on the market," – Anna Babych concludes.

The AMCU Becomes a Key Gatekeeper

Another major force shaping Ukraine's M&A landscape is the Antimonopoly Committee of Ukraine (AMCU). Once regarded primarily as a procedural step before closing a transaction, the regulator is increasingly becoming a decisive factor in determining whether and how deals proceed.

In 2025, the AMCU imposed fines totalling more than UAH 5.8 billion, six times the amount recorded a year earlier. At the same time, it significantly strengthened its scrutiny of merger control filings, particularly in strategic sectors and transactions involving complex ownership structures.

"The AMCU has evolved into a substantive regulatory gatekeeper capable of influencing transaction structures, deal timelines, closing conditions and, in some cases, whether a transaction proceeds at all", – Mariya Nizhnik, Executive Partner, Aequo

In practical terms, this means that obtaining antitrust clearance can no longer be treated as a final administrative step. In complex cases, the review process may take more than three months.

The acquisition of Tabletki.ua by Kyivstar illustrates this shift. The AMCU conducted an in-depth assessment of competition in digital platforms and access to data, ultimately imposing a number of behavioural commitments on the purchaser.

Another notable example was the privatisation of the United Mining and Chemical Company (UMCC). Despite the absence of any horizontal overlap between the parties' businesses, the Committee carried out a comprehensive competitive assessment before granting approval.

DefenseTech: The Next Major M&A Frontier

Ukraine's defence sector is rapidly emerging as one of the most promising segments of the country's M&A landscape.

In 2021, the production of military equipment and weapons accounted for only a fraction of a percent of Ukraine's total industrial output. By 2025, DefenseTech represented 2% of industrial production, while the sector's annual output had grown from USD 1.4 billion to USD 6.8 billion.

To date, most transactions in the sector have been relatively small, completed quickly, often without publicly disclosed valuations and with limited due diligence. However, the market is now preparing for deals of a fundamentally different scale.

"Companies that were first to translate battlefield experience into a business model that global investors can readily understand are gaining disproportionately greater access to capital, – Michael Lukashenko, Partner, Aequo

A landmark example is UForce. In March 2026, the company raised USD 50 million from an international syndicate comprising Shield Capital, Lakestar and Ballistic Ventures, achieving a valuation of USD 1.1 billion.

This marked the first transaction of its kind among Ukrainian DefenseTech companies. Its success was made possible by structuring the business from the outset as a global company capable of attracting international institutional investors.

Another promising direction is the development of international partnerships in drone manufacturing. Under the Drone Deal initiative, around 20 countries are currently at various stages of negotiating cooperation agreements with Ukraine.

Since the beginning of 2026, dozens of memoranda have already been signed under a framework whereby Ukraine contributes technology and critical components, international partners provide financing and manufacturing capacity, and partner governments procure the finished products.

What's Next

Ukraine's M&A market continues to offer substantial long-term growth potential.

Investment currently accounts for only 13% of Ukraine's GDP, compared with approximately 33% in upper-middle-income economies, the income category in which the World Bank classifies Ukraine. This investment gap highlights the significant capacity for further capital inflows and transaction activity.

As the market matures, the drivers of successful M&A transactions are evolving. Today, success depends less on headline valuation and increasingly on transaction structure, regulatory readiness and the parties' ability to navigate wartime realities. Domestic strategic investors are setting the pace of the market, while international investors are becoming more selective, focusing on resilient businesses with strong long-term growth prospects.

At the same time, agribusiness, technology and DefenseTech are emerging as the sectors most likely to shape the next phase of Ukraine's M&A market.

The full 2025–2026 Ukraine M&A Market Report is available via the link.