Global merger and acquisition (M&A) activity reached its highest level in four years, driven by regulatory reforms, favorable policy changes, and increased participation from sovereign wealth funds. Deal values climbed significantly in 2025, signaling renewed confidence among investors despite earlier hesitation in the first half of the year.
First-half transaction volume was the weakest for any January–June period since 2020. Nevertheless, total deal value reached USD1.93 trillion, a 20 percent increase compared to the second half of 2024 and the strongest first-half performance in three years. Momentum accelerated in the second half, with H2 2025 deal value hitting USD2.03 trillion. A surge in U.S. activity during Q3 and October—fueled by Federal Reserve rate cuts—led the rebound, more than doubling year-on-year transaction values.
Europe mirrored this trend, with aggregate deal values rising 23 percent in H2 compared to H1. Markets such as Germany and the Netherlands saw notable increases, supported by ongoing EU regulatory adjustments expected to sustain momentum into 2026.
The Middle East emerged as a key player throughout the year, with total M&A value up 170 percent by December 1 compared to all of 2024. Sovereign wealth funds were central to this growth, leveraging strategic neutrality to invest in both U.S. and Chinese assets. U.S. policy changes also eased access to advanced semiconductors, further enabling regional investments. Saudi Arabia’s IPO market performed strongly, with a healthy pipeline of upcoming listings.
In Asia-Pacific, Japan attracted record inbound investment, while regulatory updates in China encouraged domestic consolidation and boosted outbound deals. Australia gained attention for its critical minerals sector following a new cooperation framework with the United States, although recent regulatory scrutiny in foreign investment approvals introduced execution risks.
Key drivers of future dealmaking include stabilizing interest rates, continued innovation in AI and life sciences, energy transition initiatives, and the growing influence of private capital—especially sovereign investors. Companies with aligned board and management strategies are better positioned to act decisively in competitive environments.
Looking ahead, regulatory modernization, macroeconomic stabilization, and sector-specific advancements are expected to support sustained growth in global transaction volumes in the coming months.
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Policy reforms and economic tailwinds drive global M&A higher
Welcome to the latest edition of M&A insights, where we explore the forces shaping transactional activity and predict what will drive dealmaking in the year to come. n nMegadeals return as global M&A hits four-year high n nAggregate deal value rises sharply to levels not seen since 2021 n nM&A data for 2025 reveals more confidence among market participants to execute big-ticket transactions in the second half of the year, including the battle to acquire one of the biggest names in Hollywood, which if approved will be one of the largest M&A transactions in history. n nDeal count for the first six months of 2025 was the lowest H1 total since 2020. However, deal value remained robust at USD1.93 trillion, up 20% on H2 2024 and the highest H1 figure for three years. n nM&A values performed even better in H2 2025 at USD2.03tn, with a marked uptick in larger transactions. The rally was led by a Q3 surge in the U.S., where M&A by value more than doubled year-on-year in October on the back of interest rate cuts by the Fed. n nEurope’s M&A landscape followed a similar pattern; aggregate values rose by 23% in H2 2025 compared to H1, particularly in markets including the Netherlands and Germany. We saw a number of significant deals between July and December, while ongoing regulatory reforms across the EU are expected to maintain this momentum as we head into 2026. n nSummary n nPolicy and regulatory shifts are shaping dealmaking timelines and strategies globally. n nAI, life sciences and energy transition assets are in buyers’ sights. n nPrivate capital – particularly sovereign wealth – is increasingly influential. n nThe boards best positioned for success are those aligned with management teams on deal strategy, enabling confident decisions under pressure. n nDealmaking in the Middle East was strong throughout the year, driven by the region’s sovereign wealth funds in particular. Aggregate M&A by value to December 1 was 170% higher than the total for 2024. Here, U.S. policy shifts facilitated access to advanced semiconductors, while regional governments continued to leverage their strategic neutrality to invest in both U.S. and Chinese assets. The region’s IPO markets – particularly in Saudi Arabia – performed well, with good pipelines for the year ahead. n nActivity in Asia-Pacific was buoyed by record inbound investment into Japan and regulatory reforms in China, which spurred domestic consolidation deals and higher outbound investment. We expect heightened interest in Australian critical minerals assets following the recent framework deal with the U.S., although a recent case raises new M&A execution risks linked to the country’s foreign investment screening regime. n nLooking ahead, stabilizing interest rates, regulatory reforms, and sectoral innovation are set to underpin continued growth in global M&A activity in the months to come.