Austria’s 2025 Investment Slump Masks Record-Breaking Mega-Deals
Austria’s investment landscape shifted in 2025, with foreign direct investment dropping to €1.9 billion—a decline of €900 million from the previous year. The country also saw fewer deals overall, yet recorded its highest transaction value in nearly two decades, driven by a handful of major corporate moves. The year’s largest deal came from the merger between Borealis and Adnoc, which acquired Canada’s Nova Chemicals for €8.9 billion. This single transaction accounted for a significant share of Austria’s total investment flow, with over half directed to North America. Meanwhile, Austrian firms remained most active in Europe, particularly in Germany, though the Borouge International-Nova Chemicals deal skewed the numbers. High energy costs and rising labour expenses have made Austria a less appealing destination for investors. Financial transactions fell from 25 to just 20 deals, reflecting economic stagnation. The total number of transactions involving Austrian companies also dropped by nearly 10%, falling to 221 in 2025. Large corporations like Erste Group and OMV continued to pursue global acquisitions, while mid-sized businesses struggled to fund expansion abroad. The hotel sector stood out, with €480 million in transactions—mostly in Vienna—including sales of the Marriott and Ritz-Carlton hotels. Foreign investors, primarily from Germany and Switzerland, dominated this sector, making up 77% of its deal volume. Domestic transactions, however, plummeted from €400 million to just €100 million. As a result, Austria now ranks at the bottom of the EU for mergers and acquisitions activity. Despite the record transaction value in 2025, Austria’s investment environment faces challenges. Rising costs and a shrinking number of deals have weakened its position in the EU market. The gap between large corporate players and struggling mid-market firms continues to widen.
