Mergers and Acquisitions Boom 26% in First Half of 2025 Driven by Asia and U.S. Rebound

As of 20 June, the first half of 2025 saw a significant boom in mergers and acquisitions (M&A) activity, with a 26% increase in transaction frequency compared to the previous year, totaling $2.14 trillion. This surge was driven by a combination of factors, including a record rebound in U.S. equities and reduced market volatility, which provided a positive outlook for dealmakers. However, potential challenges such as the trade war initiated by U.S. President Donald Trump, increased interest rates, and geopolitical tensions could impact the market in the second half of the year.

Despite initial expectations of staggering deal activity, the first half of 2025 saw a more modest performance. However, analysts remain optimistic as the S&P 500 and Nasdaq indices reached new record highs, indicating a stabilizing market at a higher level and paving the way for more deals in the coming months.

Asia emerged as a key driver of M&A growth, with the region's M&A value skyrocketing to $583.9 billion between 1 January and 30 June 2025, more than double the $269.9 billion witnessed in the previous year. This growth was largely driven by Japan and China, as Asian firms increasingly focused on regional acquisitions. Notable deals included Toyota’s $33 billion decision to privatize one of its suppliers and Abu Dhabi National Oil Company’s offer to acquire the Australian gas firm Santos for $18.7 billion. This trend is expected to continue, with India also playing a significant role in deal volumes.

The first half of 2025 also saw a surge in megadeals, particularly those involving private targets. Over 50% of the largest 10 transactions this year were directed at non-public firms, reflecting the growing confidence of dealmakers in handling substantial transactions. Notable examples include Charter Communications' acquisition of Cox Communications in a $21.9 billion deal and Alphabet's acquisition of the cybersecurity startup Wiz Inc. in a $30 billion deal. The number of large transactions exceeding $10 billion also increased by 62% compared to the previous year, indicating a growing appetite for high-profile acquisitions.

Despite a slow start to the second quarter of 2025, the M&A market staged a comeback, with Asia leading in the volume of deals. The U.S. market also showed improvement, with larger deals accompanying the rebound. Institutional confidence is being reinforced, with more mega deals confirmed. The sequential changes in regulations and market stability create a conducive environment for major acquisitions towards the end of the year.

In conclusion, the global M&A landscape in 2025 was characterized by robust growth in Asia and a rebound in the U.S. market, driven by a combination of favorable economic conditions, supportive government policies, and a growing interest from both domestic and international investors. The trend of increased M&A activity was also evident in other regions, with companies seeking to expand their global footprint and gain a competitive edge. As companies continue to seek opportunities for growth and expansion, the M&A landscape is expected to remain active and dynamic in the years to come.