Mergers 2025: Survival instinct or strategic masterstroke
In 2025, the global mergers and acquisitions (M&A) landscape has evolved beyond traditional synergy-driven motives. The aftermath of the 2024 geopolitical upheavals, including shifts in U.S. leadership and escalating global tensions, has compelled companies to reassess their strategies. For Indian enterprises, this re-evaluation is particularly pertinent as they navigate a volatile global economy.
Global M&A activity is projected to surpass $4 trillion in 2025, marking the highest level in four years. This surge is not merely a return to pre-pandemic norms but reflects a strategic consolidation trend. Companies are pursuing mergers to achieve scale, access new markets, and acquire technological capabilities, rather than solely focusing on cost synergies. (Sources: JPMorgan, Reuters, Dealroom)
The technology sector continues to dominate, with M&A activity reaching $640 billion in 2024, a 16% increase over the previous year. This growth is driven by investments in artificial intelligence (AI), cloud infrastructure, and cybersecurity, as companies seek to enhance their digital transformation efforts. (Sources: PwC, Grant Thornton Bharat)
India's M&A activity reached a three-year high in Q1 2025, with deal values totalling $27.5 billion, a 29.6% year-over-year increase. This growth is fuelled by strong corporate balance sheets, a surge in domestic consolidation, and increased foreign investment. (Sources: Business Standard, Mint)
In 2024, India witnessed 2,186 deals valued at $116 billion, representing a 33% increase in deal volumes and a 76% increase in deal values compared to the previous year. Sectors such as technology, healthcare, and infrastructure have been particularly active, reflecting the country's robust economic fundamentals and strategic importance in the global supply chain. (Source: Grant TFhornton Bharat)
Drivers of M&A activity: Survival and strategic scale
Technological Disruption
The rapid advancement of AI and digital technologies has compelled companies to acquire capabilities to remain competitive. In India, the AI sector is expected to reach \$17 billion by 2027, prompting significant M\&A activity as firms seek to integrate AI into their operations. (Source: nishithdesai.com)
Geopolitical Realignments
The re-election of U.S. President Donald Trump and his pro-business policies have influenced global M&A dynamics. Approximately 56% of CEOs plan to actively engage in M&A in 2025, up from 37% in September 2024. However, uncertainties around interest rates and potential trade tariffs continue to pose challenges. (Sources: Reuters)
Economic Pressures
Companies facing economic headwinds are turning to M&A as a means of survival. Smaller firms, particularly in the SaaS sector, are struggling to secure funding and are considering mergers or acquisitions as viable options. (Sources: The CFO Club)
Strategic opportunities and challenges
For Indian companies, the current M&A landscape presents both opportunities and challenges. The surge in domestic consolidation reflects a strategic move to achieve scale and enhance competitiveness. However, navigating regulatory complexities and geopolitical uncertainties requires careful planning and execution.
The Indian government's focus on fostering innovation and digital transformation, coupled with a favourable investment climate, positions the country as an attractive destination for M&A activity. However, companies must remain vigilant and adaptable to capitalize on these opportunities effectively.
The Bharat blueprint: Strategic inflection points for M&A:
Regulatory Landscape in India: A Double-Edged Sword
The Competition (Amendment) Act, 2023, implemented in 2024, introduced a deal value threshold of ₹2,000 crore. While this enhances transparency, it complicates deal structuring, especially for tech and startup acquisitions. Pre-filing consultations have become critical tools for managing regulatory risks, making Company Secretaries pivotal in transaction execution.
India's 'China Plus One' Strategy
Global players seeking supply chain resilience are acquiring Indian firms to localize manufacturing. For instance, Apple suppliers such as Pegatron and Wistron are expanding in India through M&A and joint ventures. FDI inflows in manufacturing via M&A channels surged by over 40% in FY2024–25 (Source: DPIIT).
MSME, ESG, and Green M&A Trends
Many MSMEs are merging due to rising compliance costs under GST 2.0 and e-invoicing mandates. Meanwhile, ESG-driven M&A is gaining ground, particularly in renewable energy. Adani Green's acquisitions illustrate how ESG is now a due diligence imperative.
Rise of Domestic Institutional Capital
Indian investors like LIC, GIC, and ChrysCapital are increasingly backing strategic consolidations in sectors like agritech and edtech. This reduces dependency on foreign VC funding and encourages long-term strategic alignment.
Digital Public Infrastructure (DPI) and M&A
India's DPI initiatives (UPI, ONDC, Account Aggregator framework) have fuelled a new breed of data-rich startups, leading to strategic acquisitions. M&A logic is increasingly driven by API interoperability and real-time data potential.
Global Tax Structuring Complexities
With BEPS 2.0 and global minimum tax frameworks in play, Indian firms undertaking outbound M&A must manage tax defensibility across jurisdictions. CS professionals are stepping up as ecosystem architects, aligning governance with international fiscal protocols.
Post-Merger Cultural Integration
India's regional diversity and promoter-led legacy structures make cultural integration a complex task. Mergers like Zomato-Blinkit highlight the challenges of aligning teams, values, and operations.
India-Middle East-Europe Economic Corridor (IMEC)
The IMEC initiative is spurring M&A activity in logistics and port infrastructure. Strategic interest from firms like DP World shows how infrastructure corridors are reshaping acquisition targets and priorities.
AI-Powered M&A Analytics
Companies are leveraging GenAI tools to evaluate targets, forecast synergies, and optimize post-merger integration. Infosys and TCS are building internal AI-based decision systems to support M&A workflows.
Navigating the M&A landscape in 2025
The M&A landscape in 2025 is characterized by a shift from traditional synergy-driven deals to strategic consolidations aimed at survival and scale. For Indian companies, this presents a unique opportunity to strengthen their market position and drive growth. However, success in this environment requires a nuanced understanding of global dynamics, technological trends, and regulatory landscapes.
In India, mergers are no longer just boardroom decisions; they are embedded in the country's regulatory evolution, digital infrastructure, and global repositioning. From DPI-enabled fintech takeovers to ESG-mandated sustainability buys, the 2025 Indian M&A climate reflects a strategic maturity. As regulatory frameworks sharpen and cross-border complexities multiply, Indian enterprises are not just reacting — they are reshaping the very logic of scale, resilience, and global integration.
As companies navigate this complex terrain, strategic foresight, agility, and a commitment to innovation will be critical in leveraging M&A as a tool for long-term success.
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