NEW YORK/LONDON – 25 March 2025: The global M&A landscape was rocked by significant turbulence marked by shifting dynamics in 1Q25, but a March rebound in deal volume offered promising signs of recovery. According to the latest M&A Highlights 1Q25 report by Mergermarket, a service of ION Analytics, the first quarter was defined by heightened geopolitical tensions, aggressive tariff policies under the Trump administration, and seismic shifts in market confidence driven by breakthroughs in AI technology, notably DeepSeek.

Total global deal volume year-to-date (YTD) stood at USD 827 billion, up 15.5 percent from last year, despite record-low deal count in 20 years. February saw a significant slowdown at USD 259 billion across 2,638 transactions. However, March saw an uptick in activity, fueled by five mega deals (above USD 10 billion each) announced this month.

The enthusiasm that greeted Trump’s anticipated pro-business agenda – highlighted by reduced corporate taxes, merger-friendly regulatory changes, and deregulation – quickly waned as aggressive tariff measures introduced new complexities. Increased market volatility forced many companies to reassess their strategic priorities and valuation metrics. Despite these uncertainties, the broader sentiment among dealmakers remains cautiously optimistic.

Key insights from the report:

Private Equity buyouts surged despite the deal count drop: Global private equity buyout volumes rose a significant 58 percent compared to the previous year, despite a 25 percent decline in the number of deals. Transactions like Walgreens Boots Alliance’s USD 23.7 billion sale to Sycamore Partners and CK Hutchison’s USD 19.2 billion port assets divestiture to a BlackRock-led consortium demonstrate private equity’s strategic pivot towards fewer, larger investments.

Exits signal market confidence and LP pressure: Sponsor exits surged 49 percent, driven partly by a tentative rejuvenation of the IPO market. This suggests renewed investor appetite and growing confidence despite broader uncertainties. Mounting pressure to return capital to Limited Partners (LPs) also played a role in accelerating the pace of exits.

US experiences a slow decline: The US, traditionally a powerhouse for global M&A activity, recorded its lowest deal count since the 2009 financial crisis. Deal volume fell 1 percent year-on-year (YOY) to USD 401.8 billion, with the number of mega deals declining by almost half. This is further evidence of subdued risk appetite.

EMEA bucks the trend: The Europe, Middle East, and Africa (EMEA) region saw a 23 percent increase in YTD volume, propelled by Italy’s dominance in larger transactions. However, uncertainty persisted in the financial services sector, marked by precarious deals such as Banca Monte dei Paschi di Siena’s ambitious pursuit of Mediobanca and the Natixis-Generali merger facing considerable execution risks.

APAC driven by Japan and China: In the Asia-Pacific region, Japan and China’s dealmaking momentum drove activity in the region. Japan continued to be a hot buyout market for private equity, swooping in as corporates face pressure to divest assets. Major deals included Bain Capital’s USD 5.5 billion acquisition of Seven & i’s superstore business and its USD 3.3 billion acquisition of Mitsubishi Tanabe Pharma, with Bain Capital as the acquirer in both transactions.

As dealmakers navigate an environment shaped by political turbulence and transformative technological innovation, Mergermarket anticipates continued volatility in global M&A. Yet, adaptability and strategic resilience could enable opportunity in the quarters ahead.

Lucinda Guthrie, Head of Mergermarket, says, “M&A deal flow is adapting to shifting macroeconomic and geopolitical conditions set in flight by last year’s US election and renewed European focus on strategic autonomy.  While boardrooms digest the impact of tariffs and trade barriers on their businesses, dealmaking momentum has been hampered by uncertainty. There is significant pressure for private equity firms to exit portfolio companies, especially in non-cyclical industries, and for companies to find scale and adapt to the evolving business environment.”

To download the full report, click here.

**All data accurate as of 24 March 2025.