The first quarter of 2026 closed with cross-border DACH–Greater China deal volume up roughly twelve percent against the prior-year quarter, with the recovery concentrated in industrials, vertical software, and consumer brands. The recovery is uneven. Healthcare deal flow has not yet returned to its 2021–2022 levels, and infrastructure activity remains gated on policy clarity. Across the corridor we are seeing the texture of a market that has accepted higher rates as a fact rather than a transition.
Pricing has stopped overshooting
For two years, the gap between DACH seller expectations and Asian buyer pricing was the dominant feature of the corridor. That gap has narrowed. Sellers are arriving at process with more realistic price ranges; buyers are accepting that high-quality assets will not return to 2017 multiples. The result is faster processes, fewer broken auctions, and a higher conversion rate from LOI to signed SPA.
Our own observations are consistent with the broader picture. We have seen median time from LOI to close drop materially from 2024 levels. The percentage of bids landing within twenty percent of the eventual closing value has risen across our processes — a level last seen before the 2022 rate cycle.
“The corridor has accepted higher rates as a fact rather than a transition.”
Sector mix is rebalancing
Industrials continues to lead corridor deal flow, and the composition has changed. Family-owned German Mittelstand businesses considering succession-by-sale to Asian acquirers now represent a meaningful share of the activity. The buyers are sophisticated — typically Greater China strategics with operating presence in Europe, or sponsors building European platforms for Asian portfolio. Buyer questions are durability of customer relationships, capex profile, and the operational realities of running a German workforce from Asian ownership.
Vertical software is the second story. Greater China sponsors are increasingly active in DACH-anchored vertical software with Asian growth thesis. Buyer questions are recurring-revenue durability, contractual minimums, and cross-border data-residency texture.
What we are watching into Q2 and Q3
- Whether the regulatory texture for Asian inbound investment in DACH industrials remains stable. Recent BaFin and BaFA reviews have been concluded faster than feared, which has unblocked stalled processes.
- How sponsor exit pressure manifests on European portfolios. The 2018–2020 vintage funds are running out of runway; we expect more secondary processes and continuation funds in the back half of the year.
- Carve-out volume from European corporates with Asian operations. Strategic acquirers becoming sellers, particularly where the Asian asset has scale.
We will return to these themes in the Q2 update. As always, our quarterly is informed by our active engagement load and corridor observations rather than by industry surveys.