M&A Activity Trends to Watch

M&A Activity Surges Amid Policy Tailwinds and Economic Resilience: M&A activity is roaring back to life, fueled by a potent combination of resilient global growth, falling interest rates, deregulation, and greater clarity around tariffs and geopolitical risks. This new macro and policy backdrop has unleashed a fresh wave of corporate confidence, empowering CEOs and Boards to pursue bold, strategic combinations. Financing costs have declined meaningfully, with loan rates down 50 basis points in the U.S. and over 100 basis points in Europe in 2025, sharpening the math for LBOs. Meanwhile, deregulation has reduced political friction, increased certainty of regulatory approval, and accelerated deal timelines. In parallel, tariffs, once a cloud over global dealmaking, are now priced into when evaluating cross-border transactions for exporters and importers. Spin-offs are also on the rise as companies sharpen their strategic focus. U.S. spin-off volume doubled in Q2 2025, as firms seek to unlock value and shed non-core assets. The environment is now one of action, after a long period of hesitation. This resurgence comes at a critical juncture for Private Equity. With ~30,000 sponsor-owned portfolio companies globally, the industry has faced mounting exit pressure, especially for 2016–2021 vintage funds, which have reported ~20% lower DPI relative to prior funds. We are seeing green shoots with M&A up 20% and bankers on pace for their best year since 2021: IPOs, sponsor-to-sponsor deals, M&A exits, and dividend recaps are all re-accelerating. For credit investors, this is equally constructive, since ~50% of LBO capital structures are funded with debt, higher deal velocity directly supports origination pipelines. Sectors like technology, defense, energy, healthcare, transportation and business services are leading the rebound, offering rich pipelines for both equity and debt capital providers. Union Pacific-Norfolk Southern, Baker Hughes -> Chart Industries, Charter -> Cox, Alphabet -> Wiz are setting the tone, with significantly more to come as this momentum is highly likely to continue. Could it be that the best is yet to come?

M&A activity is accelerating in 2025 with deals like Aviva 's £3.7bn Direct Line takeover and the $22.5B ConocoPhillips Marathon Oil merger reshaping industries. But did you know that 33% of acquired employees leave post-acquisition, and culture misalignment is the #1 reason acquisitions fail? AI ALPI analyzed 75+ major acquisitions this quarter and found that HR involvement from day one of M&A discussions increases success rates by 40%. The most successful deals all shared one thing: CHROs were equal partners with CFOs during due diligence. Key insights for HR leaders: → Pre-merger involvement is crucial: It makes good business sense to involve HR earlier because we provide a different point of view and will ask different questions → Culture fit predicts success: Companies with high employee-engagement scores are 3x more likely to achieve post-merger synergies. Smart acquirers review Glassdoor scores before making offers ↳ 65% of 2025's healthcare M&A deals focus on therapeutic specialization rather than scale, requiring careful talent retention strategies → Speed matters: The integration timeline should be as short as possible. The quicker you integrate the two businesses the better While 59% of CEOs now prioritize acquisitions over organic growth (up from 42% in 2024), only 22% of companies use specialized M&A workflow software for people integration! 🔥 Want more breakdowns like this? Follow along for insights on: → Getting started with AI in HR teams → Scaling AI adoption across HR functions → Building AI competency in HR departments → Taking HR AI platforms to enterprise market → Developing HR AI products that solve real problems

The strategic M&A rebound continues Strategic M&A is closely watched as a barometer of C-suite confidence. Data tracked by Dealogic shows an acceleration of activity in recent months – above and beyond the elevated volumes we highlighted in March and June of this year, when we pushed against the prevailing market narrative that aggregate deal-making was muted. So far in 3Q2025, companies based in North America have already announced $240 billion worth of strategic acquisitions (as of August 5th) – making the quarter the most active since 3Q2021, with seven weeks more to go. And year-to-date volumes are now running at the most active pace since 2021 – which ultimately proved to be a record year (Exhibit 1). Beyond the aggregate strategic M&A volumes across regions, our analysis of the granular deal-level data for 2025 (YTD) reveals four key themes: (1) Large-cap ‘mega’ deals are back, (2) M&A is being used to build and add capabilities, and divestments are being used to refine focus, (3) sector ‘leadership’ has shifted so far in 2025, and (4) the financing mix is somewhat unfriendly for bondholders. #MergersAndAcquisitions #Strategic #USD #EUR #FundingMix #CorporateCredit Please see here for more: https://1blk.co/4frYeDe FOR INSTITUTIONAL INVESTORS ONLY

A summary of insights from Oppenheimer & Co. Inc. report on 1H 25 Biopharma M&A and Strategic Collaborations... M&A Activity: 1H’25 M&A totaled $56B in value across 31 M&A deals and 10 asset acquisitions. While activity is on track to surpass 2024, it still trails record-breaking 2023. Premiums are declining: average 30-day M&A premium was 62% in 1H’25 (down from 119% in 2023). Oncology dominated dealmaking, both in value and volume. Strategic Collaborations (BD&L): 107 deals in 1H’25 with $9.9B in upfronts. Big Pharma played a key role in supporting capital-constrained biotech. Oncology and CV/metabolic (especially obesity) were top focus areas. China Focus: US and EU Big Pharma remain active in sourcing Chinese assets, especially clinical-stage. Chinese deals are still cheaper upfront but milestone payments now match Western standards. Big Pharma is increasingly going direct to Chinese developers, bypassing VC-backed intermediaries. Therapeutic & Modality Trends Therapeutic Areas: Oncology led in both M&A and BD&L. Autoimmune, CNS, and CV/metabolic (esp. obesity) followed. Chinese assets are increasingly focused on oncology and bispecific antibodies. Modalities: Small molecules lead M&A and asset acquisitions. Bispecific antibodies and radiopharma are hot in collaborations. ADC activity cooled in 1H’25 but expected to rebound with data readouts. Development Stage Trends Deals span across all stages from discovery to commercial. High interest in commercial-stage assets to fill revenue gaps from upcoming LOE (loss of exclusivity). Notable activity at Phase 1 and 2 stages, particularly in early-oncology programs. Macro Context & Outlook Macro headwinds (China trade, DC uncertainty, potential price controls) continue to suppress activity. Tailwinds include: improving FDA sentiment, rate cut expectations, and increased Big Pharma capital reserves (~$300B). Upcoming LOEs on $164B worth of 2024 drug sales (e.g., Keytruda, Eliquis, Trulicity) drive urgency in pipeline replenishment. #marketinsights #biotech #capitalmarkets #venturecapital #bigpharma #innovation #thoughtleadership #competitiveintelligence

I’m hearing a lot of questions from clients about how America is in motion, and how the new administration’s policies might shape the M&A market. And after a couple of slow years, dealmakers are ready to get back to the negotiating table. There are some reasons to be optimistic about the year ahead for M&A. Here is what we’re watching: ✅ Biden administration officials often pushed back on large deals in court. They didn’t always win, but the uncertainty likely slowed M&A activity. With new leadership at the DOJ and FTC, we expect a more permissive approach. This could open the door for larger transactions.  ✅ President Trump’s reassessment of Biden-era rules could also help clear some barriers that were keeping some dealmakers on the sidelines.  ✅ Higher borrowing costs over the last two years dampened earnings and cash flow for many companies. Some of them may look to be acquired as a way to avoid bankruptcy court. Rates have already dropped from a year ago and, while the Fed will likely stick to its current wait-and-see approach in the near term, even modest interest rate reductions could improve the ROI on new deals.  ✅ A likely deregulatory environment—combined with what looks like a soft landing for the economy—could create a much-needed opening for private equity firms looking to exit long-held investments. There also are reasons for caution. The Republican coalition can sometimes be skeptical of dealmaking, especially regarding Big Tech or M&A with a national security implication. The markets are trying to digest so many tariff updates coming out of the administration. Tariffs and immigration restrictions also could add inflationary pressures or hurt growth. We’re keeping a close eye on those factors—and dealmakers should too. Read more: https://lnkd.in/e8KA2qbt 

EY-Parthenon's latest M&A insights report shows that US M&A bounced back in May, thanks in part to easing trade tensions and some big, exciting deals across media, energy, chemicals, and tech. Deals over $100M grew by 6.1% from April, and the total value jumped 39%. Even mega-deals ($10B+) saw a big boost, driven by companies looking to consolidate and invest in technology. AI also continues to be a hot area, making up about 14% of deals over $1B as businesses focus on innovation and building AI infrastructure. Of course, challenges remain—valuation gaps, inflation, and rising borrowing costs—but over half of CEOs still view M&A as a key growth strategy. The resilience and strategic intent shown by these leaders highlight a powerful truth: those who navigate thoughtfully and adapt proactively will turn uncertainty into opportunity. #MergersAndAcquisitions #Growth #Leadership #Strategy #EYParthenon

At the start of this year, the M&A community was riding a wave of optimism. Central banks were signalling rate stability, political events were behind us, and dealmakers were ready for an uptick in activity. But the markets had other plans. Midway through 2025, what are we seeing? 🟢 North America and Europe are slowly improving, buoyed by deregulation hopes, capital availability, and tech tailwinds. 🔻 Asia-Pacific remains in a downward trend with policy uncertainty and geopolitical friction. ➜ IPO activity? Slowing, but the pipeline’s healthy and could quickly reignite in calmer conditions. 📈 PE deal activity trended higher during H1 of 2025, but VCs are more tentative despite enthusiasm for AI startups. Read more in ‘Mid-2025 M&A Insights: Looking for Signs of a Second-Half Rebound’: https://lnkd.in/gqcWRDX8 #MergersAndAcquisitions #BCG #DealTrends Dr. Jens Kengelbach Daniel Kim