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Global M&A Industry Trends

M&A in 2025: Big deals, winning hands, and wild cards

The global M&A markets may finally be back on an upward trajectory as some of the economic and geopolitical uncertainties weighing on the market over the past couple of years lift. But will 2025 be a great M&A year or just another so-so one? Recent dealmaking momentum at the top end of the market suggests the upswing has already begun: the volume of deals greater than $1bn in value increased by 17% in 2024, and their average value rose. But we are also seeing some mixed signals: the volume of smaller and mid-sized deals fell by a meaningful 18% in 2024, and in the year ahead, dealmakers will need to keep their eye on some wild cards.

Deals that exceed $1bn only made up a sliver (about 1%) of the approximately 50,000 M&A deals announced globally last year, but these larger transactions often have an impact that goes beyond the actual acquisition in question. They set the tone for the whole market and grab the headlines. Executives seeing large deals happening around their industries often start to gain confidence to move forward more aggressively with their own M&A plans to stay competitive and for fear of missing out.

Several factors underlie the new-found M&A momentum. They include an intense CEO focus on growth and transformation in this new era of AI, greater capital availability, and an increased supply of assets expected to come to market—both private equity (PE) portfolio companies and non-core assets being divested by corporates. Nonetheless, dealmakers can’t ignore the wild cards, which include:

  • Volatile and uncertain geopolitics. Dealmakers and markets are still digesting the outcomes of the elections that took place in many countries during 2024 and the resulting changes to policy direction; in particular, the impact of the new Trump administration in the US as his policies and recent presidential executive orders, reverberate across the globe. Dealmakers should expect the unexpected.

  • Long-term interest rates are rising again. Inflation has continued to moderate, and central banks, including the US Federal Reserve, have reduced interest rates in recent months. However, the momentum behind rate cuts has slowed, and with long-term interest rates rising in the US and elsewhere, this could make returns harder to find and lead to more challenging refinancing processes. 

  • Valuations are high in some countries. In mid-January 2025, the forward price-to-earnings ratio for US stocks (based on the S&P 500) was 22.87, compared with 13.67 for non-US international stocks (based on the S&P International 700). Companies with higher valuations may use their stock as part of an inorganic growth strategy. We may also see more cross-border deals as US companies, buoyed by a strong US dollar, seek opportunities overseas, particularly in Europe.

‘An M&A recovery is overdue, but it may struggle to maintain its recent momentum at a time when long-term interest rates are rising and valuations are high. It’s a market that will distinguish top dealmakers from the rest. To be successful, they will need deep industry expertise and a laser focus on value.’

Brian Levy,Global Deals Industries Leader, PwC United States

Credit : https://www.pwc.com/gx/en/services/deals/trends.html