Global M&A Trends and Risks Report Unveiled by Mergermarket's Website

Global M&A Trends and Risks in Q1 and Q2 of 2025

In a recently released report, a global law firm in collaboration with Mergermarket has highlighted the key trends and risks shaping the M&A landscape in the first half of 2025. The report, titled the Global M&A trends and risks report (third edition), offers insights into the cautious but resilient dealmaking amid geopolitical and economic uncertainty.

Key Trends

Stabilizing but Subdued Deal Volumes: Global M&A deal activity stabilized from Q1 to Q2 2025, with a very slight increase in deal volume (7,776 deals in Q2, a 0.01% rise from Q1), yet deal volumes remain down 27% compared to Q2 2024. This suggests ongoing subdued investment amid macroeconomic challenges.

Investor Caution Amid Uncertainty: Elevated geopolitical tensions, global trade conflicts, and economic challenges such as high but normalizing inflation and elevated interest rates are driving sustained caution in dealmaking.

Regional Variations: While cross-border investments declined—particularly inbound flows into North America and Continental Europe—there was domestic M&A growth in regions like the UK & Ireland, the Nordics, and APAC, indicating pockets of improved confidence. EMEA showed a strong ~11% year-on-year increase in M&A volumes despite the volatility, signaling cautious optimism for the second half of 2025.

Sectoral Dynamics: Activity has been muted in sensitive sectors such as Consumer, Business Services, Industrials, Pharmaceuticals, and TMT, which are particularly vulnerable to trade tensions and economic headwinds. Conversely, the TMT sector led global deal value in Q2 with $169 billion in deals, and mega-deals (above $1 billion) increased substantially.

Resilience and Strategic Revaluation: Despite the headwinds, companies have maintained a "change is constant" mentality, showing resiliency in the face of macro volatility with total M&A dollar volumes up 29% YoY for the first half of 2025. This reflects strategic portfolio review and growth ambitions amid uncertainty.

Key Risks

Geopolitical and Trade Tensions: Escalating global trade tensions, new tariffs, and unresolved geopolitical conflicts introduce risks for cross-border deals and create uncertainty for deal valuations and timing.

Economic Environment: Elevated interest rates and inflation, although somewhat normalizing, continue to limit corporate borrowing capacity and slow deal activity, particularly in rate-sensitive and capital-intensive industries.

Market Volatility: Tariff announcements and reciprocal measures have increased market volatility, complicating forecasting and deal execution.

Overall, global M&A in the first half of 2025 has been characterized by cautious optimism with resilient dealmaking despite significant macroeconomic, geopolitical, and regulatory risks. The outlook for the remainder of 2025 suggests potential acceleration in deal activity as some uncertainties ease, but ongoing caution and creative dealmaking remain essential.

Survey Findings

The report examines trends shaping dealmaking around the world and includes a survey of 200 top-level executives from multinational corporations, large private equity firms, and major investment banks. Key findings from the survey include:

53% of respondents expected their organization's appetite for M&A to increase in 2025 compared to last year, but market turmoil caused by reciprocal tariff announcements decreased their appetite for M&A.
65% of respondents expect the use of representations and warranties insurance (RWI) to increase in 2025 compared to 2024, with more than 45% in the Middle East and South and Southeast Asia forecasting a significant increase.
51% of respondents have acquired an AI business, with respondents applying the technology to various parts of their M&A processes.
46% report that they are looking to acquire an AI business in the near term.
44% of survey participants expect domestic private equity buyers to be among the most active types of acquirers in deal markets in 2025.

The global corporate, M&A, and securities team, consisting of over 450 M&A partners and 700 other deal lawyers worldwide, offers legal advice on various M&A matters, including public transactions, take-privates, and acquisitions. The team's services cover strategic review processes, joint ventures, carveout dispositions, debt and equity capital markets transactions, governance, compliance, and general commercial and corporate advisory matters.

For media inquiries, contact Dan McKenna, the US Director and Global Head of PR and Communications, at Tel: 1 713 651 3576, or Louise Nelson, the Head of PR for Europe, Middle East, and Asia, at Tel: 44 20 7444 5086, Cell: 44 79 0968 4893.

[1] Source: Global M&A trends and risks report (third edition) [2] Source: Mergermarket analysis [3] Source: Global law firm collaborations [4] Source: Thomson Reuters Deals Intelligence

In the context of the global M&A landscape, the report suggests that the TMT sector, known for its significant technological advancements, demonstrated a leading role in global deal value, with $169 billion in deals in Q2 2025.
Despite the economic uncertainties, the survey findings reveal that a majority of top-level executives, including those from the technology sector, anticipate an increase in their organization's appetite for M&A in 2025, with 51% having already acquired an AI business and 44% planning to do so in the near term.