Law firm CMS's eighth annual M&A Study found 2015 was a record year for European activity, as was the case across the globe, with more than $5 trillion of deals tracked.
But 2016 is “already a riskier M&A environment” compared with last year, CMS said.
Uncertainty in 2016 comes from “a number of grey or black swan events”.
These include the “long predicted slowdown of China's economic growth and the greatest migration to Europe for a century across a fragile Schengen zone”, CMS said.
The report also identifies US interest rates, this year's presidential election, the UK's EU referendum and a “more aggressive corporate tax climate” as reasons for uncertainty.
Stefan Brunnschweiler, a partner and global head of the CMS corporate/M&A group, said: “We have moved into a less stable environment in 2016 after a record year for M&A in 2015, but the major strategic moves made in so many industries in 2015 are bound to elicit a forthright response from competitors. Opportunities for decisive M&A continue.”
Last year, total deal value in Europe was up 22 per cent to €990bn (£783bn) despite a drop in the volume of deals by six per cent.
Last year also saw the highest final quarter on record, with deal value exceeding €420bn.
CMS said: "As the landscape changes in 2016, sellers may have to lower their price expectations and/or heighten their risk appetite."