Dealmaking
High-profile deals become prime drivers of mergers and acquisitions surge in 2025 iStock

Global mergers and acquisitions (M&A) soared to unprecedented heights in 2025, marking the second-highest total in over four decades, according to data from the London Stock Exchange Group. The year saw deal-making exceed £3 trillion ($4 trillion) for the first time since the 2021 boom, driven by a surge in mega-deals and favourable market conditions.

Worldwide M&A activity climbed nearly 50 per cent from 2024, reaching £3.3 trillion ($4.5 trillion). This figure trails only the pandemic-fuelled frenzy of 2021.

Investment banking fees also hit their second-highest level on record, rising nine per cent to an estimated £100 billion ($135 billion). More than half of these fees originated from the United States, where deals involving American targets totalled £1.7 trillion ($2.3 trillion), the highest share since 1998.

Mega Deals Drive the Surge

A record 68 transactions valued at £7.4 billion ($10 billion) or more reshaped industries from media to industrials. Companies capitalised on buoyant stock markets, accessible financing, and a more lenient US regulatory landscape to pursue ambitious strategic tie-ups.

Tony Kim, co-president of investment bank Centerview Partners, described the activity as transformative. He noted that large-scale M&A had not been seen in a decade and required a perfect alignment of factors, all of which were present in 2025.

Mark McMaster, global head of M&A at Lazard, highlighted the strong risk appetite, supportive financing, and antitrust environments that created an 'all systems go' dynamic for completing deals.

Landmark Transactions Echo Past Booms

The year's standout deals included the fierce contest between Netflix and Paramount for Warner Bros Discovery, alongside the £185.1 billion ($250 billion) railroad merger between Union Pacific and Norfolk Southern, forming a transcontinental powerhouse.

These echoed 2021's major transactions, such as WarnerMedia's merger with Discovery and Canadian Pacific Railway's £23 billion ($31 billion) acquisition of Kansas City Southern.

Regulatory Shifts Fuel Confidence

Deal-makers attributed much of the momentum to the Trump administration's efforts to ease regulations, encouraging firms to explore combinations previously deemed too risky.

Andrew Nussbaum, co-chair of the executive committee at law firm Wachtell, Lipton, Rosen & Katz, observed a corporate willingness to accept regulatory risks for strategic gains, bolstered by regulators' openness to dialogue.

An early setback came in April with the announcement of sweeping 'liberation day' tariffs, temporarily stalling activity. However, the market rebounded swiftly, closing the year with consecutive quarters exceeding £7.7 billion ($1 trillion in M&A), a feat not achieved in four years.

Daniel Mendelow, US investment banking co-head at Evercore, reported building momentum post-recovery, fuelled by pent-up demand.

Smaller Deals Decline Amid Overall Drop

In contrast to the mega-deal rush, smaller transactions waned, with the total number of deals falling seven per cent to the lowest since 2016.

Private equity activity grew more modestly, up over 25 per cent to £658.5 billion ($889 billion). Buyout groups faced hurdles in asset sales but notched some high-profile take-privates.

The largest was the £40.7 billion ($55 billion) acquisition of video game maker Electronic Arts, led by Saudi Arabia's Public Investment Fund with support from Silver Lake and Jared Kushner.

Anu Aiyengar, global head of advisory and M&A at JPMorgan Chase, pointed out that despite perceptions of inactivity, significant sponsor-led deals occurred, enabled by diverse financing sources even as equity markets hit records.

Positive Outlook for Future Activity

The year ended on an optimistic note, with large initial public offerings, such as those for Medline and Verisure, providing new exit routes for private equity.

Andre Kelleners, co-head of European investment banking at Goldman Sachs, predicted further growth, particularly in sponsor activity, over the coming years.

As 2025 draws to a close, the M&A landscape appears poised for continued vigour, blending strategic ambition with economic resilience.

Writer's pick