Dealmakers Eye $4 Trillion-plus M&A Haul in 2025

As we approach the end of 2024, dealmakers are gearing up for a bumper year in 2025, with expectations of a $4 trillion-plus mergers and acquisitions (M&A) market. This optimism is fueled by several factors, including the promise of less regulation, lower corporate taxes, and a broadly pro-business stance under the incoming Trump administration. However, challenges such as geopolitical uncertainty and regulatory hurdles may dampen the enthusiasm.



The global M&A market experienced a rollercoaster ride in recent years, with a record-breaking recovery in 2021 followed by a steep decline in 2023. Despite the volatility, dealmakers remain optimistic about the prospects for 2025. The expected easing of regulatory scrutiny under the Trump administration is likely to boost M&A activity, with dealmakers anticipating a more accommodating environment for mergers and acquisitions.



Private equity firms are expected to play a significant role in driving the projected $4 trillion-plus M&A volume in 2025. Despite accounting for only 18% of deal activity in 2023, they have over $2 trillion in undeployed capital, which will likely entice them back into the market as stability returns. Their involvement can bring operational improvements and strategic guidance to portfolio companies, enhancing value creation. However, regulatory scrutiny and macroeconomic challenges may still temper their interest.

The resurgence of scale deals in 2024, accounting for 59% of the largest strategic deals, signals a shift towards rock-solid value creation and bankable synergies. This trend is expected to continue in 2025, particularly in industries with higher fixed costs like energy and natural resources. As dealmakers prioritize revenue and cost synergies, the focus on value creation will drive M&A activity, leading to more strategic acquisitions and consolidation. This emphasis on value will also impact the regulatory environment, with the Trump administration likely to ease oversight, making it easier for companies to complete mergers and acquisitions.



The Trump administration's proposed deregulation is expected to ease antitrust enforcement, potentially leading to more accommodating merger approvals. This shift could boost M&A activity, with dealmakers anticipating a $4 trillion-plus market in 2025. However, the extent of this relaxation remains uncertain, as the discussions suggest a middle ground between the Biden and traditional Republican administrations.

Under the Trump administration, the prospect of lower corporate taxes and a more pro-business stance could stimulate M&A activity. This is particularly relevant for cross-border deals, as reduced tax burdens could make acquisitions more attractive and affordable. However, the extent of this impact remains uncertain, as the specific details of Trump's tax policies are yet to be revealed.

The Trump administration's stance on foreign investment and national security reviews is expected to impact inbound M&A activity, particularly in sectors deemed critical to national security. The Committee on Foreign Investment in the United States (CFIUS) has been increasingly scrutinizing deals, with a 35% increase in review times over the past decade. The Trump administration's focus on "America First" policies may lead to more stringent reviews and potential blockages of foreign acquisitions, particularly from China. However, the administration's pro-business stance and promise of less regulation could also encourage more foreign investment in the U.S. market.



In conclusion, dealmakers are eyeing a $4 trillion-plus M&A market in 2025, driven by expectations of a more accommodating regulatory environment and lower corporate taxes under the Trump administration. However, geopolitical uncertainty and regulatory hurdles may pose challenges to this optimistic outlook. As dealmakers navigate the complexities of the M&A landscape, they must remain vigilant to the evolving political and economic climate to capitalize on the opportunities that lie ahead.