M&A Demand Increasing with Bullish Deals Outlook
he percentage of deals insured rising every year for the last 10 years. It’s clear that the M&A landscape is on the move, with Gallagher Specialty reporting a positive shift in the economy that is impacting the mergers and acquisitions space.
Buyers are still proceeding with caution, seeking comfort throughout the deal-making process. However, there’s a sense of optimism for 2025 after a challenging period in 2024. The latter half of the year saw a surge in sales preparations and due diligence engagements, leading to what Gallagher described as a “bounce-back effect.”
One key trend highlighted in the report is the increase in the use of M&A insurance. Over the past decade, the percentage of deals insured has been on the rise, indicating a growing reliance on insurance products in the M&A process.
The report also delves into the specifics of M&A insurance coverages, focusing on areas such as tax insurance, due diligence, and contingent risk insurance. According to Gallagher, insurance capabilities for warranty & indemnity insurance (W&I) now extend to almost every sector and jurisdiction, highlighting the adaptability and innovation within the insurance market.
In particular, tax insurance has seen a significant uptick, with a record number of submissions entering the market. Deal levels and coverage amounts are expanding, with insurance transactions ranging from hundreds of thousands to billions of dollars.
Looking ahead to 2025, Gallagher anticipates continued growth in the M&A space, fueled by a more positive economic environment. While caution is still advised, there’s a sense of excitement for the year ahead. The flexibility and innovation within the M&A insurance market are expected to drive further increases in the percentage of deals insured in the coming years.
Overall, the report paints a picture of a resilient and dynamic M&A environment, with opportunities for growth and innovation on the horizon. As the economy continues to improve, the M&A world looks set to capitalize on these positive developments in the months to come.
