Global M&A Industry Trends: 2025 Mid-Year Outlook
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- Aug 23
- 5 min read
2025 M&A Trends: Value Over Volume
Global M&A Industry Trends: 2025 Mid-Year Outlook
The global M&A market in the first half of 2025 has been characterized by a complex mix of trends, showing both a decline in deal volume and a rise in deal value. Dealmakers have been adjusting to a new environment marked by persistent economic uncertainty, geopolitical shifts, and technological disruption.
Key Trends and Market Dynamics
1. A Shift from Volume to Value: While global M&A volumes have continued to decline, dropping 9% in the first half of 2025 compared to the same period in 2024, deal values have risen by 15%. This divergence is largely driven by a "flight to quality," where high-quality companies with strong fundamentals are attracting intense interest, competitive auctions, and higher valuations. Lower-quality assets, in contrast, are struggling to find buyers.
2. The Impact of Geopolitical and Macroeconomic Factors:
Tariff and Trade Uncertainty: Geopolitical tensions and trade-related uncertainties have significantly impacted M&A appetite. Companies are taking a more nuanced approach to geography, assessing their supply chains to identify and mitigate risks. This has led to an increase in transactions with a local focus within national borders.
Interest Rates and Financing: Persistent high-interest rates and financing challenges have been a major obstacle for dealmaking. This has led to an increased use of alternative financing sources, particularly private credit, to bridge the gap left by traditional lenders.
Regulatory Scrutiny: The M&A landscape is facing heightened regulatory scrutiny, though expectations for a more business-friendly, deregulatory environment under new administrations in some major economies are fueling optimism and potentially paving the way for more mega-deals.
3. Thematic and Strategic Drivers:
Technology and AI: The acceleration of AI has become a dominant theme. Companies are actively seeking to acquire AI businesses or integrate AI capabilities to gain a competitive advantage. This is driving a significant portion of M&A activity, particularly in the tech sector, and is also influencing deals in non-tech industries as businesses look to retool their operations.
Portfolio Simplification and Scale: Many companies are focusing on strategic portfolio reviews, divesting non-core assets to focus on their core business. This drive for consolidation is particularly strong in high-fixed-cost industries like financial services, energy, and telecommunications, where scale can lead to significant cost synergies.
Supply Chain Resilience: In response to a post-globalization world, companies are pursuing M&A to reorganize their supply chains, reduce dependencies on specific markets, and reshore production to be closer to home.
4. Regional Variations:
Americas: The Americas, particularly the U.S., has dominated global M&A activity in the first half of 2025, accounting for 62% of global deal value. This is driven by strong corporate profits, cooling inflation, and optimism about a more favorable regulatory environment.
Europe: European deal value has seen a 14% decrease, with its share of global M&A declining.
Asia-Pacific: Deal activity in the Asia-Pacific region has also declined, falling by 43%, largely due to ongoing geopolitical tensions and local economic challenges.
5. Private Equity and M&A:
Dry Powder and Exits: Private equity firms are under pressure to deploy significant levels of "dry powder" and to monetize assets they have held for several years. This is expected to drive more sell-side activity, especially as financing and valuation conditions become more favorable.
Creative Deal Structures: To overcome valuation gaps, dealmakers are increasingly using creative structures like deferred consideration mechanisms and earnout provisions.
Partnerships: There is an increasing trend of multiple sponsors or sponsors partnering with strategic buyers to tackle larger deals and manage execution risk.
In summary, while the M&A market has not seen a full-scale rebound in volume, the first half of 2025 has demonstrated a shift toward more strategic, high-value deals. Dealmakers are being prudent and patient, focusing on long-term value creation, and leveraging technology and portfolio optimization to navigate a complex global landscape.
Outlook from Gold House M&A
Global M&A Industry Trends: 2025 Mid-Year Outlook
Gold House M&A is a M&A advisory firm. From our mid-year 2025 M&A outlooks, here is a summary of the key trends and expectations for the second half of the year:
Overall M&A Market Outlook
The consensus is that the M&A market, while having a slow start to the year in terms of deal volume, is on a path to a stronger second half of 2025. This is driven by a number of factors:
Improved Macroeconomic Clarity: Despite persistent geopolitical and trade-related uncertainties, there is growing confidence among CEOs and investors due to moderating inflation, a stable-to-favorable interest rate environment, and a clearer political landscape following key elections.
A Shift from Volume to Value: The market is characterized by a "flight to quality." While the number of deals may remain below historical peaks, the average deal size has increased significantly. This is driven by companies willing to pay a premium for high-quality, high-growth assets that offer strategic advantages.
Resurgence of Corporate and Private Equity Activity: Both strategic corporate buyers and private equity firms are expected to increase their M&A activity. Corporations have strong balance sheets and are focused on portfolio simplification and strategic growth. Private equity firms, in particular, are under pressure to deploy a large amount of "dry powder" and to exit long-held assets.
Key Thematic Trends
1. The Primacy of AI and Technology
AI as a Core Driver: AI is not just a trend; it's a fundamental driver of M&A. Companies are aggressively acquiring to gain AI capabilities, talent, and intellectual property. The focus is on acquiring businesses at the "infrastructure" and "platform" layers of the AI ecosystem to build a competitive moat.
Digital Transformation: Beyond AI, companies are still focused on M&A to accelerate their digital transformation, enhance cybersecurity, and improve data management.
2. Focus on Portfolio Optimization and Strategic Simplification
Divestitures and Carve-Outs: Many companies are actively divesting non-core assets to sharpen their focus on their core business. This is creating opportunities for both strategic and financial buyers, with private equity firms playing a key role as carve-out partners.
Scale and Consolidation: In high-fixed-cost industries like financial services, energy, and telecommunications, there is a strong push for consolidation to achieve economies of scale, reduce costs, and strengthen market position.
3. Geopolitical and Regulatory Dynamics
Domestic and Regional Focus: Due to trade tensions and supply chain risks, there's a heightened focus on M&A with a domestic or regional focus. Companies are looking to secure their supply chains by acquiring assets closer to home.
Regulatory Scrutiny: While Gold House anticipates a more business-friendly regulatory environment in certain key markets, anti-trust scrutiny remains a significant factor, particularly for mega-deals. Creative deal structures and strategic partnerships are being used to navigate these challenges.
4. Financial Market Conditions and Deal Structures
Private Credit's Growing Role: With traditional bank financing remaining somewhat constrained, private credit has become a crucial source of financing for M&A, particularly for mid-market deals and sponsor-backed transactions.
Creative Deal Structures: To bridge valuation gaps between buyers and sellers, dealmakers are increasingly using creative structures such as earnouts, seller notes, and deferred consideration mechanisms.
In conclusion, the mid-year 2025 outlook for M&A is one of cautious but growing optimism. While the market has been quieter in volume, the underlying drivers for strategic, high-value deals are strengthening. The second half of the year is expected to see increased activity, particularly in technology and for companies seeking to strategically reshape their portfolios.
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