M&A Forecast Indicates Increased Deal Activity
The 2025 M&A landscape is forecasted to see an increase in deal activity, marking a shift from the subdued deal environment of the past three years. Bain & Company’s recently released Global M&A Report 2025 indicates a positive outlook for dealmakers, with key findings suggesting a renewed sense of optimism in the global market.
Key trends identified in the report include a focus on scale transactions, accelerated synergy realization, and the integration of generative AI to enhance efficiency. The total global M&A market experienced a 15 percent increase in deal value in 2024, totaling around $3.5 trillion. Corporate transactions rose by 12 percent, while financial acquisitions saw a significant surge of 29 percent, largely attributed to the return of private equity to the deal table.
Despite these improvements, deal volume remains lower than pre-pandemic levels, with key barriers to deal activity such as valuation mismatches, prolonged regulatory approvals, and high borrowing costs hindering deal flow. However, an expected easing of these constraints in 2025 could potentially accelerate deal activity.
One of the notable shifts in M&A strategy highlighted in the report is the prioritization of scale deals, particularly in industries with high fixed costs like energy, financial services, telecoms, and retail. Scale deals accounted for a significant portion of the largest strategic transactions in 2024, emphasizing a shift from the previous focus on scope M&A.
Looking ahead, the EY Merger Monthly anticipates an increase in U.S. M&A activity driven by favorable macroeconomic conditions, regulatory shifts, and a growing appetite for strategic deals. Despite concerns over regulatory scrutiny, there is expected to be a rise in CEOs’ interest in engaging in M&A activities due to improved policy clarity.
The report also emphasizes the role of generative AI in enhancing M&A efficiency, with an increasing number of M&A professionals utilizing AI across various stages of the deal cycle. The adoption of generative AI is expected to increase further by 2027, with its use aimed at reducing manual effort, accelerating diligence timelines, and improving synergy estimates.
Overall, Bain’s outlook for 2025 is cautiously optimistic, citing potential interest rate cuts, regulatory clarity, and pent-up demand for dealmaking as factors that could drive growth. Companies that align their M&A strategies with emerging trends such as scale transactions, AI integration, and rapid synergy realization are likely to be best positioned to capitalize on the evolving deal landscape.
In conclusion, 2025 may mark the beginning of a more dynamic M&A cycle, offering strategic dealmakers and investors opportunities to seize competitive and profitable deals that enable sustainable growth in the changing market environment.
