Mergers and acquisitions volumes are set to surpass $4 trillion in 2025, fueled by Trump’s pro-business stance, deregulation, and lower taxes.
The global mergers and acquisitions (M&A) market is set to exceed $4 trillion in 2025, according to leading investment bankers. This milestone, the highest in four years, is largely attributed to the pro-business policies promised by U.S. President-elect Donald Trump, who has signaled a shift toward deregulation, lower taxes, and reduced barriers to business growth.
2024: A Year of Mergers and Acquisitions Recovery
This year, M&A volumes rose by 15%, totaling $3.45 trillion, marking a significant recovery from 2023’s $3 trillion—a decade-low figure. Dealmakers believe that the momentum seen in 2024 will only accelerate, largely driven by Trump’s pro-business stance and his plan to overhaul regulations that have long been a barrier for major mergers. A 15% to 20% increase in global M&A activity is anticipated, with expectations that 2025 could be one of the best years for the sector in recent memory.
Factors Driving Mergers and Acquisitions Growth
Several key factors are fueling the optimism surrounding mergers and acquisitions for 2025:
Regulatory Shifts: One of the most significant drivers of growth is the shift toward a more business-friendly regulatory environment. Trump’s appointment of Andrew Ferguson as the Federal Trade Commission (FTC) chair is expected to lead to more lenient antitrust enforcement, easing the path for large-scale M&A deals that would have faced significant hurdles under previous administrations.
Economic Stability: Trump’s proposed tax cuts, coupled with a reduction in corporate regulations, are expected to create a more predictable and stable environment for dealmaking. With lower corporate taxes, businesses are likely to have more liquidity to pursue strategic acquisitions and expansions.
Improved Financing: The current low interest rates and recovery in the IPO market have created a favorable environment for private equity firms and other investors. With lower financing costs and a stronger stock market, firms are looking to seize opportunities for strategic mergers that will position them for long-term growth.
Regional Mergers and Acquisitions Highlights
In 2024, the U.S. saw M&A volumes rise by 10% to $1.55 trillion. Similarly, Europe and Asia-Pacific regions experienced strong growth, with both seeing double-digit percentage increases in deal volumes. The global nature of the mergers and acquisitions landscape is becoming increasingly evident, with major players in these regions seeking opportunities across borders.
The Role of Private Equity in Mergers and Acquisitions Growth
Private equity firms have been a driving force behind the resurgence in M&A activity. Leveraged buyouts (LBOs) increased by 35%, reaching $600.8 billion in 2024. Some of the largest deals involved private equity giants such as:
- Blackstone’s $16 billion acquisition of Australian data center operator AirTrunk
- Silver Lake’s $13 billion take-private transaction of entertainment conglomerate Endeavor Group
John Collins, global co-head of M&A at Morgan Stanley, noted, “The recovery of the IPO market is unlocking opportunities for private equity firms, allowing them to monetize assets and drive M&A growth.”
Challenges Facing the Mergers and Acquisitions Market
Despite widespread optimism, the M&A market faces several challenges that could temper the growth seen in 2025.
Tariffs: Potential tariffs under Trump’s administration may result in increased costs for goods and services, which could, in turn, create inflationary pressures that affect corporate profits and overall economic stability.
Uncertainty: While the promise of deregulation is a major selling point, the full impact of these changes on M&A activity remains uncertain. The political environment could shift, affecting the dealmaking process in unexpected ways.
Global Economic Uncertainty: Geopolitical risks, including tensions between major economic powers, may lead to disruptions in trade and financing, which could slow M&A activity in certain sectors.
Landmark Mergers and Acquisitions Deals in 2024
Several landmark transactions have already taken place in 2024, demonstrating the strength of the M&A market:
- Mars’ $36 billion acquisition of Kellanova
- Capital One’s $35 billion acquisition of Discover Financial
- Synopsys’ $35 billion purchase of Ansys
These deals signal the robust health of the M&A sector and suggest that 2025 will see even larger, more complex transactions.
2025 Outlook for Mergers and Acquisitions
Looking to the future, M&A experts remain bullish on 2025, predicting that mergers and acquisitions will continue to grow across a variety of sectors. The booming U.S. economy, coupled with pent-up corporate demand for strategic growth, should drive deal volumes higher.
Cross-border Mergers and Acquisitions are expected to play an even more prominent role in the coming years. With U.S. companies seeking to expand globally, foreign buyers—especially those from cash-rich economies—are increasingly targeting U.S.-based businesses. Emerging economies, particularly in India and Japan, are expected to become hot spots for private equity investment due to their growing consumer markets and stable growth prospects.
Technology Sector Dominates Mergers and Acquisitions Activity
In 2024, the technology sector accounted for the largest share of M&A activity, with deal volumes surpassing $534 billion. The continued push for digital transformation is expected to drive further dealmaking in this space, with larger tech giants looking to acquire smaller, innovative companies that can help them expand their capabilities.
Conclusion: A Promising Year Ahead for Mergers and Acquisitions
Heading into 2025, deal volumes are poised to return to pre-pandemic levels, approaching $4 trillion annually. With Trump’s pro-business policies, a recovery in financing, and strong economic fundamentals, the M&A market is set for a robust year ahead. While 2025 may not reach the record highs of 2021, the outlook remains exceedingly positive for dealmakers.