PwC’s 2025 M&A Outlook Predicts Increase in Deal Flow
PwC, Price Waterhouse Cooper, has just released its M&A Outlook for 2025 and the future is looking bright for mergers and acquisitions in the U.S. According to PwC, a combination of declining interest rates, a surplus of dry powder, the need for business model reinvention, and changing regulatory priorities are paving the way for a surge in deal-making.
Despite a clearer economic and policy outlook, dealmakers will still need to navigate a complex environment shaped by potential changes in trade, tariffs, and security policies under the incoming Trump administration. PwC advises dealmakers to prioritize agility and strategic focus to succeed in this shifting landscape.
The U.S. M&A recovery is expected to gain momentum in 2025 as dealmakers adjust to new regulatory changes, the Fed’s interest rate adjustments, and other macroeconomic and geopolitical factors. With the potential for significant deregulation in industries like oil and gas and increased scrutiny for Big Tech, the deal-making environment could be volatile.
In 2024, there were 9,780 deals worth $1.05 trillion, showing a slight increase in both volume and value compared to the previous year. However, some PE exits were delayed over the past two years, creating more opportunities for corporate acquirers as certainty returns to the market.
Looking forward to 2025, PwC predicts that companies will turn to strategic M&A to drive EPS growth expectations and justify valuations. Deal-makers will need to focus on simplifying their portfolios and developing a focused value creation strategy in the face of a slowing economy.
In conclusion, PwC believes that the conditions are ripe for a moderate to significant recovery in deal-making in 2025, as long as there are no external shocks. The deal-making environment may have slowed in the run-up to the election, but with ample dry powder and a backlog in the M&A pipeline, the future looks promising.
For more information about PwC and their insights, you can visit their website.
