Global M&A activity What to expect in 2025
M&A remained comparatively slow in 2024 but is expected to gain momentum in 2025. M&A Market underperformed relative to projections, however some areas still got positive shifts. Such as deal value raised from 12% to $3.4 trillion but various hurdles kept the growth at steady pace.
Many Private Equity firms encountered difficulties in raising new capital, but they are expected to ramp up dealmaking as they distribute returns to investors. Many complexities that made deal making a struggle in last couple of years are fading which may revolutionize major market areas in 2025. That being said, uncertainties like geopolitical and regulatory risks could still cause disruptions.
Dealmakers won't all reap the same rewards;
It depends on various regions and their economic conditions, yet those who align their M&A approaches productively are expected to gain the best rewards from it. Today’s market is clearly divided into winners and those who struggle to keep up.
The formula for M&A success is only about creating a balance between expansions through acquisitions and internal growth, with robust expertise at every phase of the M&A process. From sourcing opportunities to seamlessly integrating them for maximum efficiency one can master deal-making.
Why Optimism Wins for Positive Outcomes?
Despite the fact that M&A faced some huge challenges in 2024, there is hope for those with positive and confident minds.
Why? Because:
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Stable Economy
Economies are much more stable today than anticipated, many feared of Global Recession which didn’t happen leaving positive expectations. Additionally, Employment rate is stable, stock market is thriving and borrowing costs are lower. -
Businesses
Have Cash As per the report the businesses have strong balance sheets and cash position. Estimates suggest that around $7.5 trillion in cash remains idle on nonfinancial balance sheets. It gives them an opportunity to invest in potential deals after a huge pandemic market slowdown. - Industrial Shifts Companies that focused on organic growth during the pandemic are now exploring new expansion opportunities. Banking, life sciences, oil & gas, and technology industry need new capabilities to stay ahead of the competition. While others aim to strengthen leadership through acquisition enabling them to stay competitive amid shifting business demands.
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Effective M&A strategies
The most accomplished and high performing deal makers approach M&A strategically by making small to medium acquisitions that outshine others. These small deals are fruitful for them in long tern success and growth -
Regulatory & Political Changes
Political evolutions are also reshaping the regulatory changes. For instance, the U.S Recent rulings in the energy sector that favored green technologies are expected to shift significantly toward fossil fuels. Likewise, Europe is emphasizing on sustainability rules while China sees India as a competitor, driving supply chain shifts.
As the industries are revolutionizing and regulatory trends are adopting, M&A has become a fundamental tool for businesses to strongly encourage a strategic and investment pivot in the coming years.
Private Equity’s Unique Influence
Private Equity played a Pivotal role in 2024, accounting for 24% of global M&A value, up from 21% in 2023. Deal Value also increased 22%, however, PE-backed deal volume declined by 29%.
IN 2025, PE could play even a major role in deal making by bridging the valuation gap, steady interest rates, and declining inflation rates. The key reasons of their success in 2025 would be due to,
- PE has a lot of money to spend, a record $2.9 trillion in dry powder is waiting to be invested.
- They have old investments that can be sold for benefit, since in 2024 the average hold time hit a record 8.5 years and deal makers are eager to utilize this opportunity.
- PE dealmaking is picking up but is still below 2021 levels. For example, in the Americas, PE’s share of M&A in 2024 was $398 billion (22% of deals), far lower than the $865 billion (28%) in 2021. Similarly, such disparities are present across Europe, the Middle East, Africa, and the Asia-Pacific region.
- In the US alone, private assets grew from 34% from 2020 to 2023 and rose up to $28 trillion which was almost same amount a public mutual funds, exchangetraded funds, and closed-end funds. The number of funds further got an increase of nearly 60 percent.
Since private equity has a huge amount of money available to invest and the pressure to sell old investments. Private equity is positioned to flourish M&A activity to new heights in 2025.
Since private equity has a huge amount of money available to invest and the pressure to sell old investments. Private equity is positioned to flourish M&A activity to new heights in 2025.
M&A Market Expectations for 2025
Along with Private Equity there are some other key changes expected in M&A in 2025, which we will briefly elaborate here,
- Substantial Expansion
As we have discussed above, a high rise is expected in M&A in 2025. The reason behind that is because of the lower interest rates, political stability following key elections, and strong equity markets. As per the report, 87% of M&A professionals anticipate increased activity while 39% are expected to gain a significant value in 2025.
- Cybersecurity in M&A
Cybersecurity plays a crucial role in M&A due diligence, since high potential cyber threats have led to major capital losses and unfinished deals. 2025 will be all about emphasizing robust security assessments. Before finalizing deals, buyers must verify that target companies maintain robust IT security and adhere to compliance standards.
- AI M&A Considerations
As AI is becoming increasingly popular in various areas, it will highly influence the M&A market as well. In 2025, AI related acquisitions will be under highlight, but grabbing the best companies remains difficult due to rapid market changes. Therefore, companies might look for partnerships or minority investments to reduce risks.
- Regulatory Challenges
Regulatory hurdles are expected in 2025, it would impact the approval of deals, particularly in the areas such as technology, personal data and national security. The new regulations would demand a more detailed disclosure of M&A deals which will increase the complexity and time.
- Geopolitical & Trade Risks
Political uncertainties and changing trade policies could disrupt economic growth. As per a survey, global authorities suggested geopolitical instability as the biggest risk, with trade policies a close second. Tariffs and economic complications could make dealmaking harder, especially in North America, APAC, and Europe.
How to Succeed in M&A in 2025
Regardless of market fluctuations, regulatory hurdles and trade risks, top deal makes work on productive strategies over the time. Companies need to underline the best practices for efficient deal making, some of the key strategies to improve M&A success include,
- Reduce Global Risks
- Consider Smaller Deals
Instead of focusing on larger deals, smaller acquisitions can be more rewarding. They assist in mitigating risks, test strategies, and build experience in M&A.
- Utilize AI for finding deals
- Enhance Due Diligence
- Unlock Full Potential
- Streamline Integration Plans
- Drive Business Evolution
- Focus on Value Creation
By adopting top-tier methodologies, businesses can address M&A challenges and take advantage of growth opportunities in 2025. Now is the time for companies to assess their assets, utilize data intelligence, and be ready to capture high-impact opportunities.
Closing a deal involves numerous moving parts and intricate compliance challenges that require expert management. SS&CO’s Deal Support Solutions put forward the expertise and precision needed to smoothly navigate complex transactions, ensuring accuracy, efficiency, and timely execution.
Meet the Expert
Sidra Salman
Managing Partner
Sidra Salman, Managing Partner at SS&Co, leading fintech innovation with trust and expertise.
