M&A dealmaking rises despite macro headwinds
The macro clarity that prevailed in Q1 dissipated in Q2 on the back of US tariff announcements, reciprocal measures, and ensuing market volatility. Despite the persistent headwinds, the market has remained resilient—and so too the leaders shaping it. Total M&A dollar volumes in 1H were +29% YoY as companies maintain a "change is constant" mentality*. Uncertainty will persist, particularly in tariff-sensitive industries—but many companies are seizing the opportunity to reevaluate their portfolios and strategic ambitions with newfound perspectives.
*Source: Dealogic as of July 10, 2025.
Key Drivers Unlocking 2H 2025 M&A Activity
Corporate focus on growth bolsters large-scale strategic dealmakingAs companies shift from cost-cutting to long-term growth, the number of mega M&A ($10B+) deals hit a record high in 1H*, driven by increased CEO confidence in operational investments and strategic M&A—in many cases tied to bolstering capabilities in AI.
Sponsor activity is poised to take hold, risk-on but measuredFinancial sponsors are strategizing for success despite macro uncertainty, gradually building momentum. Pressure from LPs to generate distributions and a rapid acceleration of innovation are driving them to act, albeit cautiously.
Separations and streamlined business structures remain attractive options to unlock shareholder valueAs interest rates stay relatively attractive, equities rise, and inflation falls, separation activity continues to accelerate. Companies are leveraging bespoke solutions to unlock value and streamline operations.
Activists find new entry points in valuation volatilityRecent market volatility, driven by tariff implications and geopolitical uncertainty, has created new entry points for activists in 2H. Now, activists are calling for transparency on resilience plans, in addition to the diversification or reconfiguration of suppliers, in an effort to hedge risk.
Europe and APAC see boost in both cross-border and domestic growth acquisitionsThe global drive for innovation has fueled cross-border activity, with companies aiming to diversify their revenue streams by entering new markets, especially in rapidly growing emerging economies. At the same time, intra-regional deal activity is on the rise as companies seek domestic consolidation amid macroeconomic uncertainty.
*Source: Preqin as of July 10, 2025.
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The role of financial sponsors in funding growth has become more critical than ever, while the demand for essential assets remains paramount.”
Global M&A 2H 2025 Outlook
A Bold Path for Strategic Growth
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