A significant rebound in global mergers and acquisitions (M&A) is projected for 2025, with total deal value estimated at $4.8 trillion, marking a 36% increase compared to the previous year. This resurgence, reported by Bain & Company, signals the second-highest total M&A value on record, driven primarily by a series of megadeals valued at over $5 billion.
The M&A landscape is witnessing a shift, as companies historically classified as infrequent acquirers are now making substantial investments. Although the total number of deals is only expected to rise by 5%, the substantial increase in deal value underscores a renewed confidence among businesses willing to take significant risks. Notably, deals exceeding $5 billion account for approximately 75% of the growth in strategic deal value, with about 60% of these transactions attributed to infrequent acquirers.
Technology and Advanced Manufacturing Drive Growth
The surge in deal-making is particularly pronounced in the technology sector, where a focus on artificial intelligence (AI) has led to an increase of over 76% in deal value, reaching $478 billion. Almost half of the strategic technology deals valued at more than $500 million this year involved AI-native companies or projects highlighting AI benefits.
Advanced manufacturing also contributed significantly to the M&A revival, with a 38% increase in deal value, totaling $717 billion. The geographical scope of this resurgence is global, with the United States leading in deal value, accounting for nearly 50% of the total strategic M&A activities. Greater China holds the second position in deal count, primarily driven by a robust domestic market, while Japan’s M&A market doubled in value, emerging as the third-largest globally.
Bain’s analysis indicates a broad-based resurgence across industries, with double-digit percentage increases in deal value across various regions. The report highlights that over 85% of more than 300 M&A executives surveyed cited the central role of M&A in their strategic planning as a key driver for increased deal-making.
Factors Fueling the M&A Resurgence
Several factors are contributing to this year’s M&A revival. Eased regulations and lower capital costs are making it easier for companies to engage in acquisitions. The buyer-seller valuation gap has narrowed, with current valuations averaging 11.6x EV/EBITDA, although they remain below the peaks observed in 2021.
Executives increasingly recognize that delaying action is counterproductive in the current strategic landscape, particularly as AI disrupts traditional business models. The optimism surrounding M&A is evident, as many companies are eager to reposition themselves in the market.
Despite some uncertainties related to tariffs and trade dynamics, these factors have had a limited impact on M&A activities. Fewer than half of M&A executives indicated that trade restrictions would alter their overall deal plans. In fact, the rate of cross-border deals remains stable, demonstrating resilience in the face of global trade challenges.
As companies allocate resources to build resilience and invest in technology, the report notes that capital expenditures for M&A have reached a 10-year low, constituting just 7% of cash expenditures among nearly 700 S&P World Index companies. This decline reflects a shift in priorities, with investments in technology and infrastructure taking precedence over traditional M&A activities.
The growing role of AI in the M&A process is another noteworthy trend. Approximately 75% of strategic acquirers are considering AI’s impact on potential targets, with many executives utilizing AI for deal sourcing and integration planning.
As the M&A landscape continues to evolve, Bain & Company plans to release its full 2026 Global M&A Report in January, which will provide deeper insights into the anticipated trends and challenges facing deal-makers in the coming year. This report will include a comprehensive analysis of various industries and the perspectives of M&A practitioners across multiple countries, including the United States, Australia, and Japan.
