Mergers and Acquisitions (M&A) are poised for a significant resurgence in 2025. As businesses navigate national elections, geopolitical conflicts, and trade wars – partly influenced by returning Trump-era policies – value-driven M&A deals are emerging as a key strategy to mitigate global risks. 

A favorable macroeconomic backdrop is supporting this rebound. With long-term interest rates on the rise, inflation cooling, and central banks like the US Federal Reserve and the European Central Bank easing monetary policy, deal volumes are set to grow. However, a slower-than-expected pace of rate cuts has complicated refinancing and return on investment (ROI) projections for investors. 

In 2025, M&A will help businesses build corporate resilience by addressing supply chain vulnerabilities and opening access to new markets.

With lesser regulatory scrutiny and lower borrowing costs, the 2025 M&A market provides dealmakers with: 

• Increased deal activity 
• Stronger private equity (PE) participation
• Targeted sector growth 
• A more adaptable regulatory environment.

Q1 2025 data underscores this momentum with deals valued above $1 billion which is up 17% on 2024 volumes. As dealmakers adjust to capital cost fluctuations, the global M&A trajectory remains upwards. The overwhelming majority of CEOs who oversaw significant acquisitions during 2022-2025 are preparing for similar moves in the 2025-2028 period.

Given its far-reaching effects on industries and global markets, dealmaking shifts towards stable growth despite economic and geopolitical uncertainties.

Global M&A deal activity is mostly driven by:

• Strategic focus on in-depth industry expertise and value
• Pursuing strategic growth and diversification
• Penetrating markets in other countries
• Attaining cost synergies 
• Adapting to the regulatory environment 
• Leveraging tech advancements
• Mitigating market disruptions
• Achieving economies of scale.

2025 M&A Highlights:

1. Cross-border M&A will reshape global industry landscapes.
2. Environmental, social, and governance integration will become a deciding factor in deal success.
3. Private equity will drive nearly 30% of global deals.
4. Technology acquisitions will surge as firms seek innovation advantages.
5. AI will be increasingly embedded in due diligence, boosting accuracy and insights.

What’s Driving M&A Activity in 2025?

Economic Recovery & Resilience

Global M&A activity is buoyed by steady macroeconomic conditions. 

Despite trade-related tensions, GDP growth has outpaced fears of recession. Many dealmakers now see durable economic conditions as an opportunity to advance strategic initiatives.

Key enablers include:

• Improved regulatory frameworks
• Solid employment rates 
• Lower cost of capital 
• Less restrictive monetary policy
• More stable valuations 
• The US markets contributing 60% of global equity capitalization.

Corporations across finance, energy, technology, life sciences, and industrials are leveraging strong balance sheets to pursue:

• Innovation-focused portfolio shifts
• Targeted small-to-medium-size acquisitions
• Divestiture of non-core assets
• Virtual dealmaking platforms for increased efficiency
• Shareholder returns exceeding 2.3% annually.

Upcoming regulatory rulings will further shape corporate M&A strategy, focusing on:

• Looser capital requirements 
• Balanced consumer protection
• Eased anti-money-laundering rules
• Refined sustainability standards.

Global economic resilience will further shape strategic focus on investment and M&A transactions.

Tech and AI-led Acceleration

AI is transforming dealmaking. Generative AI enhances corporate profitability, operational efficiency, and opens new revenue channels.

The disruptive power of this cutting-edge technology creates M&A tailwinds while more and more businesses are adopting AI at scale. AI-powered solutions present a deal-making advantage by creating greater efficiencies, wider revenue sources, and partnership opportunities.

Expect deal activity to concentrate around:

• AI startups and digital infrastructure
• Data centers and power generation
• Strategic partnerships over pure buyouts
• Expansion into adjacent sectors through smart tech integrations.

By 2030, investments in AI and related infrastructure are projected to redefine competitive landscapes across industries.

M&A investor priorities will shift from a mere ‘buy’ strategy to a wider ‘build’ approach, including wider capital, strategic partnerships, and alliances. 

Owing to expanded AI-value chains, M&A dealmakers will make strategic acquisitions to leverage wider market share and value.

Private Equity Dry Powder & Corporate Cash

Private equity (PE) will remain a dominant force, powered by over $2 trillion in global dry powder. With average hold times reaching 8.5 years in 2024, funds are under pressure to deploy capital.

M&A deals depend on sponsor-led contributions by financial sponsors, indicating a wide room for dealmaking growth. Private ownership PE is also driven by the private investment industry growth, indicating substantial assets in private funds on the backdrop of stock market highs and low interest rates.

Key factors supporting PE momentum:

• Robust fundraising for large-cap buyouts
• Resilient private debt and real estate markets 
• Dual focus on growth and margin expansion
• Growing investments in technological solutions and data centers
• Use of stock as a strategic lever for inorganic growth
• Emphasis on data, tech, and digital infrastructure.

Private equity-backed transactions now represent one-third of total M&A volume. These deals will continue to grow in size and complexity.

Cross-Border Deal Resurgence

Fueled by a strong US dollar, American firms are actively pursuing overseas opportunities, especially in economically strained European markets. 

Key trends include:

• US private capital targeting stable European regions
• Surge in European buyout deals over $1B
• Expanded activity in APAC and LatAm for diversification.

Top M&A Trends to Watch in 2025

2025 Trend	Description
Geopolitical shifts & cross-border activity	Increased scrutiny, national interest alignment, and regional diversification
Digital & tech consolidation	AI, cybersecurity, SaaS, and automation will dominate deal pipelines
Sectoral realignment	Healthcare, energy, and industrials show renewed M&A interest
Private equity power plays	Rise of take-privates, secondary buyouts, and operational focus
ESG-driven deals	Sustainability and green finance shape investor priorities

Key M&A Risks and Regulatory Hurdles in 2025

Antitrust Enforcement

US regulators are tightening their grip. The revised Hart-Scott-Rodino (HSR) rules require stricter pre-merger disclosures. State-level rules and EU regulatory updates will elongate deal review timelines.

• EU’s Foreign Subsidies Regulation impacts AI and tech deals
• The UK Competition and Market Authority (CMA) will fast-track simple cases, but most will face more scrutiny

Considering tougher antitrust enforcement measures, M&A dealmakers should pursue a proactive approach to navigate the emerging regulatory landscape and comply with antitrust requirements.

ESG Disclosure Compliance

ESG due diligence is now a dealbreaker. New global standards from the ISSB and the EU’s CSRD require buyers to assess ESG risks and long-term viability.

• The US mandates material climate risk disclosure
• EU frameworks emphasize transparency in supply chains and environmental practices
• CSDDD requires buyers to evaluate human rights and environmental impacts pre-acquisition.

The synergy of robust ESG regulations and increasing investor demands necessitates ESG due diligence during large deals. Investors consider ESG factors in appraising the target company’s viability and resilience in the long term.

IFRS Sustainability Disclosure Standards set by the International Sustainability Standards Board (ISSB) harmonize global ESG reporting to enhance comparability and mitigate the risk of cross-border disclosure.

ESG due diligence helps M&A board representation detect potential risks and wider business opportunities to safeguard investment value and facilitate sustainable growth. 

Corporate Sustainability Due Diligence Directive (CSDDD) and other regulations address human rights and environmental impacts on the operations and value chains of the target companies subject to M&A transactions.

The US ESG regulations disclose material climate risks, while the EU ESG norms impose wider reporting requirements under the Corporate Sustainability Reporting Directive (CSRD). 

M&A dealmakers should integrate ESG due diligence best practices to assess the target company’s ESG strategy. 

Cybersecurity Diligence

Cyber threats can derail deals. 

Cybersecurity due diligence will predetermine the success of big deals in 2025 and beyond. The growing impact of cyber threats necessitates an in-depth exploration of the target company’s security standing to prevent considerable financial and reputational losses for the acquirer.

Comprehensive cybersecurity due diligence will help to spot potential cyber vulnerabilities, appraise the target’s security controls, and assess incident response capabilities by: 

• Review of security controls and incident response
• Past breach history and future preparedness
• Regulatory compliance across data jurisdictions.

Both buyers and sellers must prioritize a strong security posture to avoid fines and post-deal disruption.

Detecting weaknesses at the early M&A stages allows the acquiring company to factor remediation costs into the M&A deal, negotiate terms, or abandon a high-risk acquisition.

The regulatory landscape across national jurisdictions will further emphasize data protection and breach notifications. Acquiring the target venture with poor cybersecurity practices could result in non-compliance issues and fines. 

2025 will prioritize greater focus on proactive cybersecurity measures during the M&A due diligence process. The buy-side M&A will require scrutinized audits and evidence of robust security measures. The sell-side M&A will show a strong national security posture to attain a higher valuation. 

Currency Fluctuations & Geopolitical Risk

Exchange rate volatility impacts deal valuations, especially in cross-border M&A. Hedging and proactive geopolitical due diligence are essential to reduce risk exposure from:

• Regional conflicts
• Political transitions
• Trade tensions

All of the above deepen geopolitical instability by disrupting supply chains, altering regulatory environments, and lowering investor CEO confidence. All these factors adversely affect the feasibility and attractiveness of prospective M&A targets. 

M&A dealmakers should conduct robust due diligence on the geopolitical context of their target’s operations and markets. 

How to Prepare for the M&A Landscape in 2025

In 2025 and beyond, M&A dealmakers will sharpen sophisticated approaches on all stages of the deal cycle by leveraging:

• Early-stage due diligence: Identify red flags and assess deal fit early
• Sector-specific expertise: Develop deep knowledge of target markets
• Data-driven deal sourcing: Use AI and analytics for opportunity discovery
• Virtual data rooms (VDRs): Streamline collaboration and compliance

With over $3.4 trillion circulating across M&A dealmaking, there are wide opportunities for programmatic acquirers to further invest in M&A capabilities and generate more value. 

Best practices moving forward:

Eliminate exposure to global challenges	Leverage M&A to cope with global risks by mitigating supply chain vulnerabilities, deploying alternative sources, and using new demand and overall market opportunities.
Forge transformations	Leverage successful transactions as success cases to initiate broader transformations. Deploy virtual data room deal platforms aimed at reshaping market structures and industries.
Focus on smaller deals	Alleviate transaction-related risks and streamline the M&A process.
Deploy AI	Newly generated solutions, like predictive modeling and advanced data analysis, provide richer insights to outperform the competition. Following the M&A deal closure, GenAI solutions allow for: Monitoring macroeconomic conditionsScanning public companies and corporate databasesBenchmarking key performance indicatorsOutlining projectionsIdentifying priorities and risks.
Prioritize M&A due diligence	Invest in the due diligence process at the early deal stages to emphasize value creation and make informed investment decisions. Due diligence helps M&A buyers integrate essential must-haves like legal, financial, and IT compatibility, as well as regulatory compliance of the target company. The process helps M&A investors to objectively assess supply chain resilience, inflation-related strategies, and overall ESG compliance.
Capture synergies	Focused on cost, do not overlook revenue and mixed synergies.
Intensify integration-oriented approaches	Deploy AI potential to ensure business continuity and nuanced problem-solving. Automate core tasks and educate teams on the best M&A practices. Sharpen integration blueprints to integrate deeper into the deal rationale and value-creation priorities. Engage wider teams in integration activities to ensure informed decision-making.

Expert Insights 

In 2025 and beyond, leading dealmakers will pursue M&A as a growth strategy. 

To approach dealmaking successfully, they will strategically deploy M&A to expand and transform their business models by re-shaping:

• Distribution channels
• Value chains 
• Customer communications 
• Dealmaking platforms. 

More and more acquisitions will focus on revenue and margin growth, new market penetration, enhancing capabilities, and optimizing operational efficiencies. 

With enormous opportunities ahead, M&A dealmakers should prepare to cope with the following challenges:

• The development of a solid contingency plan
• Synergy of corporate strategy, M&A deal perspective, and geopolitical risk assessment 
• Value creation in the markets with slowing economic growth 
• Plan B for the halted M&A process
• AI impacts the target company’s performance.

The economic outlook indicates the resurgence of M&A dealmaking on the buy side and the sell side. The new round of M&A dealmaking in 2025 and beyond will not go through a linear trajectory. This means that more dealmakers will deploy smart options like virtual data room (VDR) platforms and AI-powered solutions to leverage M&A momentum and secure informed investments among business leaders.

The long-anticipated resurgence in mergers and acquisitions is demonstrating a broadening scope, encompassing a greater number of sectors and geographies, alongside an increase in the prevalence of large-scale transactions. This trend is reinforcing the positive momentum observed since 2024. Nevertheless, a significant potential for both positive and negative unforeseen developments persists. Consequently, dealmakers must maintain rigorous vigilance regarding valuations, interest rates, and geopolitical factors in the forthcoming year. Lucy Stapleton, Global Deals Leader, PwC UK

Buy-side M&A should emphasize the execution of integration post-closures. Virtual data rooms are secure, centralized dealmaking platforms that ensure a streamlined M&A process and efficient collaboration among business executives and deal stakeholders. Camilo Franco, Director M&A Integration and Operations, Jamf

Conclusion

The 2025 M&A landscape is shaped by strategic growth, cost synergies, market penetration, and innovation. Tech acceleration, stable economic outlooks, and increased private equity participation are powering this resurgence.

M&A valuations prioritize intangible non-core assets like intellectual property and customer relationships. ESG due diligence will play a pivotal role in M&A dealmaking to ensure the target’s long-term growth.

Our key takeaways suggest that cutting-edge technologies will further revolutionize the due diligence process with even deeper data analysis, integration planning, and risk appraisal. 

AI-generated solutions will help M&A counterparts identify key operational and valuation assets, enhance transparency, and ensure informed decision-making for successful closures of M&A deals.