Corporate dealmaking has accelerated dramatically in 2025, with global merger and acquisition volume reaching $3.17 trillion despite ongoing trade tensions and regulatory complexity. Companies are increasingly treating acquisitions as essential tools for navigating technological disruption and building competitive advantages in an uncertain economic environment.
What Is Driving the Resurgence in M&A Activity?
Deal volumes for transactions above $100 million are expected to grow 9% in 2025, with corporate M&A up 10% and private equity activity increasing 8%, according to EY’s M&A activity insights. This represents a meaningful recovery from the relative lows experienced in 2023 when high interest rates and regulatory scrutiny dampened activity.
Several factors are fueling the resurgence. Artificial intelligence investments in data centers and tech infrastructure are creating acquisition targets and strategic imperatives. Easing credit conditions have improved financing availability. Perhaps most importantly, valuation gaps between buyers and sellers have narrowed after years of misalignment.
The momentum is expected to continue into 2026, with divestiture activity and AI-driven investments providing additional fuel. Companies that delayed strategic moves during uncertain years are now moving forward with renewed confidence.
Which Industries Are Seeing the Most Dealmaking?
Technology, banking and capital markets, and power and utilities have dominated megadeal activity. According to PwC’s Global M&A Industry Trends, the top three deals announced in the first half of 2025 span these sectors: Google’s $32 billion proposed acquisition of Wiz in technology, Constellation Energy’s $26.6 billion proposed acquisition of Calpine in energy, and Global Payments’ $24.25 billion proposed acquisition of Worldpay in banking.
Healthcare and consumer goods have also seen significant activity. Mars acquired Pringles maker Kellanova for $36 billion, while Aviva’s takeover of Direct Line consolidated the insurance sector. The Vodafone and Three merger received approval to create the UK’s largest mobile network.
Energy sector consolidation continues at a massive scale. The ConocoPhillips acquisition of Marathon Oil, valued at $22.5 billion, represents one of the year’s largest transactions as oil and gas companies seek scale and efficiency.
How Are Tariffs Affecting Deal Strategies?
Trade policy uncertainty has complicated dealmaking but not stopped it. A PwC Pulse Survey from May 2025 found that 30% of U.S. companies had paused or revisited deals in response to tariff uncertainty.
However, 51% of companies continue pursuing transactions, viewing M&A as essential for business model reinvention and transformation. Companies are adapting their strategies to the new environment, focusing more on domestic and intra-regional acquisitions rather than complex cross-border deals that carry additional regulatory risk.
The return of what market participants call “Merger Monday” demonstrated continued appetite. U.S. companies sealed deals worth $35 billion on a single day in December, suggesting dealmakers are finding ways to move forward despite uncertainty.
What Role Is AI Playing in M&A Decisions?
The rapid advancement of artificial intelligence has created both opportunities and urgency for acquirers. According to PwC, companies face a dual challenge: the risk of acquiring a business on the brink of disruption and the opportunity to harness new technologies for competitive advantage.
This dynamic is reflected in capability-driven deals like Google’s proposed $32 billion acquisition of Wiz, which aims to strengthen cloud security capabilities. Companies across industries are rapidly developing AI agents to enhance productivity, reduce costs, and unlock new revenue opportunities, making targets with AI expertise increasingly valuable.
Investment in digital infrastructure and energy to support AI growth has already begun, creating acquisition opportunities in adjacent sectors. The next six to 12 months will be critical for leaders positioning their companies for the next wave of innovation.
How Are Private Equity Firms Approaching the Market?
Private equity activity showed a steady upward trend through 2025, with September achieving record performance for the year. PE sponsors deployed capital into large-scale healthcare and technology assets while pursuing minority investments in consumer and energy sectors.
The approach reflects a balanced strategy combining mega-scale initiatives with targeted investments in digital infrastructure and energy transition themes. According to EY, divestitures, especially tax-free spin-offs, are anticipated to see significant rebounds with projections suggesting 12 to 14 high-value transactions in 2025.
With substantial dry powder available, private equity firms continue playing a leading role in shaping deal volumes. The pressure to deploy capital and generate returns for limited partners ensures that PE will remain active regardless of broader economic uncertainty.
What Challenges Should Dealmakers Anticipate?
Despite improved conditions, significant obstacles remain. Regulatory scrutiny has intensified, particularly for AI-driven acquisitions and cross-border transactions. Governments are imposing stricter antitrust regulations in technology and healthcare sectors.
Integration challenges persist as well. Companies pursuing horizontal mergers must navigate cultural clashes, valuation disagreements, and the complexity of combining operations. The Swisscom acquisition of Vodafone Italia, for example, faces extended scrutiny from European regulators.
Geopolitical uncertainties and interest rate fluctuations continue shaping dealmaking strategies. However, Bain & Company’s M&A Report found that top-performing acquirers are adapting by prioritizing rapid value creation and pursuing both revenue and cost synergies in tandem rather than waiting for perfect market conditions.