Global M&A Market Set for Strong Rebound in 2025, Bain & Company Report Finds
After three years of sluggish mergers and acquisitions (M&A) activity, the global M&A market is poised for a resurgence in 2025, according to Bain & Company's latest Global M&A Report.
The report attributes the expected rebound to easing interest rates, regulatory shifts, and a growing need for businesses to adapt to technological disruption and post-globalization challenges. M&A Gains Traction Amid Economic Uncertainty
Despite persistent economic volatility, shifting supply chains, and geopolitical tensions, companies are increasingly turning to M&A as a strategic tool for expansion, consolidation, and innovation.
According to Les Baird, Partner and Global Head of M&A and Divestitures at Bain & Company, M&A activity is cyclical and 2025 is expected to mark a turning point: 'While we saw a modest recovery last year, deal value remains historically low as a percentage of global GDP. However, as market headwinds ease, more companies will re-enter the dealmaking landscape.' Key Drivers of the M&A Upsurge
Bain's report highlights several factors fueling the M&A resurgence: Technology Disruption: Generative AI, automation, quantum computing, and renewable energy are driving strategic acquisitions.
Generative AI, automation, quantum computing, and renewable energy are driving strategic acquisitions. Regulatory Easing: New policies in the EU and US are expected to foster a more favorable M&A environment.
New policies in the EU and US are expected to foster a more favorable M&A environment. Private Equity Resurgence: Financial sponsors, including private equity firms, are eager to deploy capital as markets stabilize.
Financial sponsors, including private equity firms, are eager to deploy capital as markets stabilize. Asset Pipeline Growth: Corporations reassessing strategies, PE firms seeking liquidity, and distressed asset sales are fueling a strong pipeline for dealmaking. Generative AI Transforming M&A Processes
The report reveals a rising adoption of generative AI to optimize M&A transactions.
A survey of 300+ M&A professionals found that: 21% already use AI in dealmaking ( up from 16% last year ).
already use AI in dealmaking ( ). One-third expect to integrate AI into their M&A strategies by the end of 2025.
According to Baird, AI will reshape every stage of the M&A process, from deal sourcing and due diligence to integration planning: 'AI will drastically accelerate traditional processes, enabling firms to complete integration and divestiture planning in a fraction of the time.' Middle East: A Rising M&A Powerhouse
The Middle East emerged as a key player in global M&A, with deal values surging 52% in 2024 to reach $29 billion.
Sovereign wealth funds and government-backed entities in the UAE and Saudi Arabia dominated the region's M&A activity, particularly in: Energy & Natural Resources – Nearly 80% of regional deal value .
– Nearly . Advanced Manufacturing & Technology – Attracting significant investments.
Major Transactions: Saudi Aramco's $8.9 billion acquisition of Rabigh Refining & Petrochemical.
Cross-border acquisitions in Europe surged by 120%, reflecting a strategic shift toward European investments.
Meanwhile, Asia-Pacific investments dropped by 78%, indicating a change in Middle Eastern investor focus. 'With continued government backing and strong cross-regional investments, the Middle East is set to drive high-value strategic acquisitions,'
said Gregory Garnier, Partner and Head of Bain's Private Equity and Sovereign Wealth Fund Practice in the region. Sector-Specific M&A Trends
Bain's report outlines key industry trends shaping the global M&A market: Energy & Natural Resources – Hit a record $400 billion in 2024, fueled by oil & gas consolidation and portfolio reshaping.
– Hit a record $400 billion in 2024, fueled by oil & gas consolidation and portfolio reshaping. Financial Services – $309 billion in M&A deals, with banks scaling up and insurers focusing on fraud prevention and identity security.
– $309 billion in M&A deals, with banks scaling up and insurers focusing on fraud prevention and identity security. Consumer Products – 19% drop in M&A activity, as firms prioritize divesting low-growth assets.
– 19% drop in M&A activity, as firms prioritize divesting low-growth assets. Retail – After regulatory hurdles, the sector rebounded, with 75% of retail executives planning more acquisitions in 2025.
– After regulatory hurdles, the sector rebounded, with 75% of retail executives planning more acquisitions in 2025. Media & Entertainment – Traditional media giants consolidating to compete with Big Tech. Outlook for 2025
With regulatory and financial pressures easing, M&A is expected to gain momentum in 2025, driven by: Tech-driven acquisitions.
Strategic realignments in key industries.
Growing investor confidence in stabilizing markets.
As companies seek to navigate an evolving global landscape, M&A will remain a critical tool for growth and transformation.
With the Middle East playing an increasingly pivotal role, 2025 is shaping up to be a landmark year for dealmaking.
News Source: Gulf Business
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