Publications

Closing the Skills Gap: How Acquisitions Strengthen European Businesses

Martin Bakker, Partner, MDN Group

Across the European Union, many industries continue to face a shortage of skilled workers. As technology evolves and business models change, the demand for specialised expertise often grows faster than the available talent pool. At the same time, costs for recruitment, training, and salaries are rising – placing additional pressure on companies.

This shortage is particularly visible in high-growth industries such as technology, advanced manufacturing, life sciences, and renewable energy, where innovation cycles are accelerating. In these areas, the competition for qualified engineers, data scientists, and skilled technical operators has become especially fierce. Many business leaders, therefore, look for alternative strategies beyond traditional recruitment.

For those seeking a long-term solution, acquiring another company can be a highly effective way to secure talent while unlocking multiple additional benefits. By pursuing strategic acquisitions, companies not only address immediate workforce challenges but also strengthen their market position, gain operational efficiencies, and open new pathways for growth.

Talent Acquisition Through M&A

When acquiring a business, the buyer immediately gains access to a workforce with specialised expertise. This not only fills critical skills gaps but also strengthens the capabilities of the combined organisation. In some cases, acquisitions are motivated primarily by the desire to secure human capital rather than physical assets or market share. For example, a mid-sized European IT services firm may acquire a smaller software development company in order to secure hard-to-find programming expertise.

“In today’s competitive market, talent is often as valuable as technology or assets. Through acquisition, companies can secure both.” Robert Nilsen, Associate, MDN Group

Knowledge Transfer and Workforce Development

M&A enables cross-training and knowledge sharing between teams. Employees from both companies can exchange best practices, creating a stronger, more versatile workforce prepared for future challenges. Knowledge transfer is particularly valuable when entering a new sector or adopting advanced technologies, as the acquired company often has specialised know-how that would take years to develop internally.

In addition, structured integration programs can enhance long-term workforce productivity. Many successful acquirers implement workshops, team exchanges, and joint training initiatives to ensure a smooth flow of expertise. This creates a learning culture that boosts competitiveness and adaptability.

Employee Confidence and Morale

An acquisition can also send a powerful signal to employees. It demonstrates that the company is investing in its future, creating stability, and committing to long-term growth. For the workforce of both buyer and seller, this can inspire confidence and improve retention.

The enlarged organisation typically offers a broader range of career opportunities. Employees may find themselves working on international projects, gaining exposure to new industries, or accessing more sophisticated training. These opportunities help attract young professionals and retain senior staff, both of which are critical for sustainable growth.

Innovation Through Diversity

By combining teams with different experiences and perspectives, acquisitions can foster a culture of creativity. Innovation often arises when different ideas and skills intersect. For example, a food-processing equipment manufacturer acquiring a company with strong pharmaceutical expertise may be able to apply best practices across industries, generating entirely new product concepts.

This diversity of thought can be particularly valuable in industries where innovation drives competitive advantage, such as life sciences, clean technology, or consumer goods. Beyond immediate operational synergies, the cultural blending of two companies can create a fertile environment for fresh ideas, accelerating research and development.

Operational Efficiency

Post-acquisition integration often leads to streamlined processes, improved systems, and more efficient workflows. When companies consolidate supply chains, harmonise technologies, and centralise administrative functions, they can achieve significant cost savings.

Furthermore, freeing up management time from administrative burdens allows leadership teams to focus on higher-value tasks such as strategic planning, market expansion, and customer engagement. This dual benefit – efficiency and focus – ensures that the acquisition creates lasting improvements rather than short-term fixes. M&A Community emphasises the critical role of change management, as up to 41% of deal failures result from cultural and integration missteps.

Access to New Markets

Another strategic advantage of acquisitions lies in market access. Many acquisitions bring geographic expansion or entry into new customer segments. Target companies often hold specialist knowledge, distribution channels, and client relationships that would otherwise take years to develop organically.

For instance, a German engineering company might acquire a French competitor not only to secure skilled staff but also to expand its customer base in Southern Europe. Similarly, acquiring a business with established regulatory expertise in healthcare or chemicals can enable faster entry into highly regulated markets.

Acquiring another business is not only a solution to immediate skills shortages but also a strategic path to long-term growth. For sellers, the investment they have made in building a skilled workforce becomes a key value driver when preparing for an exit. Buyers, in turn, view employees as valuable assets that strengthen the future of the combined business.

“When preparing a company for sale, we often see that the skills, training, and culture built over time are just as important to buyers as financial performance. People are the true asset.”  Denis Stukalov, Managing Partner, MDN Group.

At MDN Group, we support business owners across Europe through every stage of the M&A process – from planning and positioning to negotiation and successful completion. For a confidential discussion about the options available for your business, please contact our advisory team.

Our Services at a Glance

M&A Advisory & Selling / Buying Support
MDN Group offers full-service M&A Advisory, guiding clients through end-to-end execution – identifying targets, structuring deals, managing due diligence, and negotiating terms – with clarity and independence. Whether you’re planning to sell or acquire, our specialists tailor bespoke solutions that align with your strategic goals.

Strategic Advisory & Business Valuation
Beyond transactions, our Strategic Advisory team helps firms address value-creation challenges before, during, and after a deal. When precision matters, our Business Valuation services – ranging from comparable company analysis to discounted cash flow models – ensure you understand the true value of your enterprise.