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In 2024, M&A volumes globally declined by 17%, while deal values rose by 5%, driven by an increase in large transactions. In 2025, M&A remains a vital strategy for companies aiming to achieve growth in an environment where organic revenue expansion is increasingly difficult. In addition, the need to divest non-core and low-growth assets to reallocate capital to core segments and accelerate business transformation, as well as mounting pressure on private equity to exit investments, will support M&A activity. But dealmakers must navigate geopolitical and regulatory uncertainty and carefully balance risk and value creation.
The global M&A market may be poised for a resurgence after a prolonged slowdown driven by economic and geopolitical uncertainty. Early indicators suggest that 2025 could see a notable rebound: high-value deals increased significantly in 2024, with rising transaction values reflecting renewed confidence at the top end of the market. However, small and mid-sized deal volumes have declined, and uncertainties persist.
While transactions exceeding $1 billion accounted for just 1% of the approximately 50,000 M&A deals announced globally last year, their impact goes far beyond their numbers. These high-profile deals set the market’s tone, capture headlines, and can spark a ripple effect. When executives see large-scale transactions shaping their industries, they often gain the confidence to pursue their own M&A strategies – both to stay competitive and to avoid missing out.
Looking ahead, we expect several factors to drive M&A activity. The exact timing remains uncertain, but the underlying demand for deals is stronger than ever. Private equity firms face mounting pressure to sell, creating a backlog of potential transactions. At the same time, rapid technological advancements – especially in AI – are pushing companies to use M&A as a strategic tool to scale and transform their business models.
“M&A momentum is building, fuelled by growth ambitions, portfolio reshaping, and the need to adapt to a rapidly changing business environment. Success will depend on navigating challenges and acting decisively.”
Marc SchmidliPartner, Deals Leader, PwC SwitzerlandGlobal M&A volumes declined in 2024...
Between 2023 and 2024, deal values increased by 5%, while deal volumes declined by 17%. This trend was consistent across regions but varied at the country level. In the Americas, US deal values grew by 6%. In EMEA, several megadeals in the UK drove deal values higher, whereas many other European countries saw declines. In Asia Pacific, Japan and India performed strongly, with deal values up 24% and 20%, respectively. Despite these gains, deal volumes fell in all regions compared to 2023.
… but deal values increased due to more large and megadeals
Large M&A deals are on the rise, with transactions over $1 billion increasing from 430 in 2023 to over 500 in 2024. This surge has driven average deal sizes up by 11%, reaching $146 million in 2024. Meanwhile, small to mid-sized deal numbers remained sluggish, affected by valuation gaps and a tough private equity market. The growth in billion-dollar deals is largely driven by corporate buyers taking advantage of their high stock valuations and top-tier PE funds pursuing larger acquisitions as they raise record amounts of capital.
In 2024, of the 502 deals worth more than $1bn, 72 were megadeals (deals greater than $5bn), compared to just 61 in 2023. Early in the year, most megadeals were concentrated in technology, energy, and banking, but activity later broadened across sectors. Notably, the three largest deals of the year spanned different industries: Couche-Tard’s $39 billion bid for Seven & i Holdings (retail), Capital One’s proposed $35.3 billion acquisition of Discover Financial Services (banking), and Synopsys’ planned $32.5 billion purchase of Ansys (software).
Takeaways for dealmakers
We expect these key factors to drive M&A activity in 2025, influencing dealmaking and strategic business decisions:
1. Business growth and strategic reinvention
As organic growth slows, businesses are turning to acquisitions as a key strategy to increase revenues and adapt to economic challenges. Many CEOs are prioritising transformation and future expansion, with M&A playing a crucial role in reshaping business models, entering new markets, and leveraging AI and technology to stay competitive.
We also expect another trend to continue in 2025, namely companies refining their portfolios by divesting non-core or low-growth assets to focus on core capabilities. This trend is evident for industrials, but also in sectors such as consumer health and entertainment, with recent examples including GE’s split, Sanofi’s stake transfer in Opella to CD&R, and Comcast’s spin-off plans.
2. AI-driven transformation
AI is reshaping industries, with CEOs anticipating AI to boost profitability and drive reinvention. While results are still evolving, its adoption is fuelling M&A as companies seek efficiency gains, new revenue streams, and competitive advantage.
AI is attracting trillions in capital, driving a surge in investments in data centers, digital infrastructure, and power generation. This investment cycle is shifting the focus from traditional M&A to building infrastructure through partnerships and alliances. However, strategic acquisitions in the AI value chain are on the rise as well as companies look to secure market share and drive growth through innovation and cross-sector collaborations. These cross-sector dependencies are driving new business models, partnerships, and growth prospects, creating further opportunities for dealmaking.
Recent investments in data centers and digital infrastructure include DigitalBridge and Silver Lake’s $9.2bn investment in Vantage Data Centers, Blackstone’s $16bn acquisition of AirTrunk, and the announced $500bn ‘Stargate’ joint venture by OpenAI, SoftBank, and Oracle. In power generation, Microsoft partnered with Constellation Energy to restart Crane Clean Energy Center, while Google teamed up with Intersect Power and TPG to invest $20bn in renewable energy for data center expansion by 2030.
3. Private equity exits
In 2025, we expect an increase in the number of PE-backed companies coming to market as limited partners intensify pressure on PE firms to exit older investments. According to PitchBook, nearly half of the 29,400 PE portfolio companies globally have been held since 2020. This imperative to sell mature assets is driven by investors’ scrutiny of returns and PE firms’ need to raise new capital. Without distributing returns from existing investments, they may struggle to attract new capital.
Obstacles to clear in 2025
With the above factors underlining renewed M&A momentum, dealmakers must also navigate unpredictable challenges, including:
1. Volatile and uncertain geopolitics
Global political uncertainty and policy changes could have a significant impact on M&A. Several major economies, including Canada, France, Germany, and South Korea, are facing political instability, with national elections scheduled for 2025. Geopolitical tensions – ranging from the Russia-Ukraine war and developments in the Middle East to China’s growing influence – add further complexity. The impact of the US election is particularly crucial, as new policies could have far-reaching effects on dealmaking. Deregulation and tax cuts might stimulate business activity, but national security concerns and data-related deals could still face regulatory hurdles. Meanwhile, protectionist trade policies and tariffs risk driving inflation and higher interest rates, creating additional challenges for M&A.
2. Rising long-term interest rates
Although central bank rate cuts in 2024, including a 100-basis-point reduction by the US Federal Reserve, have supported M&A activity, uncertainty remains as long-term rates continue to rise heading into 2025. Nevertheless, greater capital availability from banks and the private credit market, which now manages $1.7tn, is supporting M&A activity. Debt issuance in high-yield bonds and leveraged loans surged in 2024, and PE firms are acquiring private credit companies to capitalise on growth. As private credit lending increases, restructurings have also risen, often resolved through consensual solutions between sponsors and lenders. This trend is expected to continue globally in 2025.
3. High valuations in some countries
High valuations in some regions also add complexity, with US equities trading at premium levels compared to international counterparts. As US companies leverage a strong dollar for cross-border deals, particularly in Europe, dealmakers must remain vigilant in balancing risks and opportunities.
Some key insights for Switzerland
The unclear impact of geopolitical developments, including the new US administration’s policies and discussions on tariffs, remains a major concern. Switzerland’s ability to navigate these challenges and maintain investor confidence will be critical in driving M&A momentum.
Stable economic and regulatory environment: Switzerland’s reliable political climate, robust regulatory framework, and investor-friendly policies continue to attract both domestic and international investors. This creates a supportive environment for M&A, ensuring smooth transaction processes and favourable conditions for investment.
Resilience amid global uncertainties: Despite global economic challenges, Switzerland’s strong economy and strategic positioning are expected to sustain a positive M&A outlook. The Swiss National Bank’s interest rate cuts are supporting dealmaking activity, further enhancing the country’s appeal.
Sector-specific growth: The pharmaceutical, technology, and financial services sectors are poised for significant M&A activity. Companies in these industries aim to enhance innovation, consolidate operations, and expand their market presence, driving numerous acquisition deals.
Digital transformation and sustainability: Swiss companies are increasingly prioritising digital transformation and sustainability, leading to strategic acquisitions. Firms are targeting businesses with advanced technologies and sustainable practices to boost their competitive edge and align with market trends.
“As Swiss companies focus on digital transformation and sustainability, strategic acquisitions are driving innovation and ensuring competitiveness in a rapidly evolving global market.”
Marc SchmidliPartner, Deals Leader, PwC SwitzerlandM&A in 2025: balancing geopolitical risks and value creation
M&A momentum is building, but dealmakers must proceed with caution. While the availability of capital has improved, today's higher interest rates require a sharper focus on value creation to secure strong returns. In distressed situations, early engagement with lenders can significantly improve the chances of a successful restructuring. Despite ongoing challenges – from valuations and interest rates to geopolitical tensions – the foundations for an M&A resurgence appear stronger than in previous years. Expectations of a recovery have been disappointed in the past, but this time more factors are in favour of increased deal activity.
Successful dealmakers will be those who are able to navigate geopolitical challenges by integrating them into their due diligence processes and deal assessments. They will also conduct thorough evaluations of transactions involving strategic US technology, critical infrastructure, or sensitive personal data.
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