Global M&A Industry Trends: 2025 Mid-Year Outlook

Global M&A Industry Trends: 2025 Mid-Year Outlook | Bestar

2025 M&A Mid-Year Outlook

Global M&A Industry Trends: 2025 Mid-Year Outlook

The global M&A industry is navigating a complex landscape in mid-2025, characterized by a mix of challenges and emerging opportunities. While overall deal volumes have seen a decline in the first half of the year compared to 2024, deal values are actually up, driven by a "flight to quality" and larger, more strategic transactions.

Here's a mid-year outlook for global M&A in 2025:

1. A Nuanced Market: Value Up, Volume Down, and a Flight to Quality

• Higher Deal Values, Lower Volumes: The first half of 2025 saw a 9% decline in M&A volumes globally compared to H1 2024, yet deal values increased by 15%. This indicates a trend towards fewer but larger and more significant transactions.

• Flight to Quality: High-quality companies with consistent track records, strong management, and well-supported growth plans are attracting competitive interest, often fetching higher prices and valuations. Conversely, lower-quality assets are struggling to find buyers. This "cream of the crop" focus partly explains the rise in deal values despite fewer transactions.

2. Key Drivers and Themes:

• Strategic Growth and Capability Enhancement: Companies are using M&A to refresh portfolios, enhance strategic positioning, and boost operational capabilities. This is particularly evident in the pursuit of new technologies and expertise.

• AI as a Catalyst: Artificial Intelligence (AI) is a significant driver. Companies are actively seeking to acquire AI businesses or integrate AI capabilities into their operations. This is leading to a convergence of sectors, with deals bringing together tech companies with energy providers and real estate players to build digital infrastructure.

• Economic Stabilization and Normalizing Monetary Policy: Expected interest rate cuts and moderating inflation are providing more predictability for deal planning. While interest rates remain a factor, the shift towards a more stable economic environment is encouraging dealmakers.

• Private Equity Activity and Dry Powder: Private equity firms are under pressure to deploy their substantial "dry powder" (uninvested capital). They are actively pursuing deals, leveraging various strategies like minority stake sales and continuation funds to unlock liquidity.

• Supply Chain Resilience and Geopolitics: The volatile geopolitical backdrop and trade tensions are pushing dealmakers to take a nuanced view of geography. Companies are looking to strengthen critical supply chains through targeted acquisitions and are assessing dependencies and risks to build more resilient operations. This can lead to increased domestic focus or reallocation of capital to more stable regions.

• Thematic Investing: Dealmakers are increasingly focusing on long-term structural themes such as technological disruption, climate change, demographic shifts, and supply chain resilience. This thematic approach provides a strategic anchor for M&A decisions.

3. Regional Highlights:

• Americas: Americas-based buyers increased investment by 16% in H1 2025, with a strong domestic focus (91% of capital staying within the region). The US, in particular, continues to dominate M&A activity, with a positive economic outlook and corporate confidence.

• Asia Pacific: While Asia Pacific buyers expanded investment within their own region, they more than doubled their investment into the Americas, with the Americas representing 22% of their total deal value in H1 2025, up from 11% the previous year. Asia saw a significant surge in deal value in H1 2025, more than doubling the previous year's total.

• EMEA: EMEA buyers saw a slight 3% decline in total deal value year-over-year but increased spending in both the Americas and Asia Pacific, reallocating capital towards higher-growth or more accessible markets. European deal value declined by 14% in early 2025.

4. Impact of Interest Rates:

• Cost of Capital: Higher interest rates continue to influence the cost of borrowing, which can affect valuations and the financial viability of debt-financed deals, particularly for leveraged buyouts by private equity.

• Creative Deal Structures: Buyers are exploring different financing methods, including increased use of equity capital and private credit, and even vendor financing, to bridge valuation gaps in a higher interest rate environment.

• Strategic Buyers' Advantage: Strategic buyers with strong cash reserves may be less reliant on debt financing and could find opportunities to acquire businesses at potentially lower valuations compared to periods of lower interest rates.

5. Sector-Specific Trends:

• Technology & Software: Remains a leading sector for M&A, driven by AI, digital transformation, and the need to acquire new capabilities.

• Industrials and Services: Continued momentum, with a focus on core competencies and mission-critical areas like AI-enabled defense systems and drone technologies. Strengthening critical supply chains through targeted acquisitions is also a key theme.

• Life Sciences and Healthcare: Ongoing innovation and the need for scale are driving consolidation.

• Energy-Transition Technologies: Gaining momentum as companies focus on sustainable energy sources, including solar, wind, energy storage, and grid modernization.

In conclusion, while the M&A market in mid-2025 is not without its challenges, particularly regarding overall deal volume, it is showing resilience. Dealmakers are adapting by focusing on strategic, high-quality assets, leveraging technological advancements (especially AI), and navigating geopolitical complexities with a more nuanced approach to geographic investment. The second half of 2025 is anticipated to see continued momentum, with a potential increase in activity as market sentiment improves and delayed deals come back to the forefront.

How Gold House M&A can Help

Global M&A Industry Trends: 2025 Mid-Year Outlook

Gold House M&A is a boutique M&A advisory firm that is associated with Bestar, an accounting, audit, and business consultancy firm, particularly in Asia. It is a "division" of Bestar.

Here's how Gold House M&A (as part of Bestar) can help businesses with their M&A needs:

1. Strategic Advisory:

• M&A Strategy Development: We can help you define your M&A goals and develop a tailored strategy that aligns with your overall business objectives, whether it's for growth, market expansion, capability acquisition (like AI integration), or divestiture.

  
  

• Target Identification/Buyer Sourcing: Leveraging our network and market knowledge, we can identify potential acquisition targets that fit your strategic criteria or find suitable buyers for your business if you're looking to sell.

  
  

• Market Analysis: We conduct in-depth market research to pinpoint opportunities and assess the competitive landscape relevant to your M&A ambitions.

  
  

• Valuation: We provide accurate and objective valuations of your business or potential targets, ensuring you negotiate fair and advantageous deals. This involves considering financials, market conditions, and future potential.

  
  

• Deal Structuring: We help structure deals to maximize value and minimize risk, taking into account payment methods, tax implications, and risk allocation.

  
  

2. Deal Execution:

• Negotiation: Our experienced team acts as skilled negotiators, representing your interests to achieve the best possible deal terms, including price, payment structure, and closing conditions.

  
  

• Due Diligence Coordination: This is a crucial area where we excel. We coordinate and conduct thorough due diligence across various aspects:

  
  

  • Financial Due Diligence: Analyzing financial statements, revenue streams, cash flow, and debt to assess financial health.

  • Legal Due Diligence: Examining contracts, intellectual property, litigation, and regulatory compliance to identify potential legal risks.

  • Operational Due Diligence: Evaluating business operations, management team, supply chain, and customer base.

  • Tax Due Diligence: Assessing tax structures, potential liabilities, and optimization opportunities.

  • Commercial Due Diligence: Assessing the commercial viability of targets.

    
    

• Regulatory Compliance: We help navigate complex regulatory landscapes and obtain necessary approvals, such as antitrust review or foreign investment approvals.

  
  

• Deal Documentation: We draft and negotiate legal agreements (e.g., purchase agreements, merger agreements), ensuring your interests are protected and compliance with all applicable laws.

  
  

• Closing: We assist with the closing process to ensure a smooth and efficient transaction.

3. Post-Merger Integration (PMI):

• Integration Planning: We assist with developing a comprehensive integration plan for a seamless transition, covering organizational structure, operational processes, and systems.

  
  

• Cultural Integration: We can help bridge cultural differences between the merging entities, fostering a positive work environment.

  
  

• Synergy Realization: We help identify and realize the anticipated cost savings and revenue increases from the merger.

4. Leveraging Bestar's Broader Expertise:

• As part of Bestar, Gold House M&A can draw upon Bestar's extensive experience in accounting, audit, tax advisory, corporate support services, and business consultancy. This integrated approach ensures that all financial, legal, and operational aspects of an M&A transaction are covered comprehensively.

  
  

• This can be particularly beneficial for SMEs (Small and Medium-sized Enterprises) in Asia, as Bestar often caters to these businesses, helping them with fundraising, working capital expansion, and strategic growth.

Why Choose Gold House M&A (Bestar)?

• Specialized Expertise: We bring specialized knowledge and experience in M&A transactions, crucial for navigating complexities and avoiding costly mistakes.

  
  

• Objectivity: We provide an objective perspective, helping clients make informed decisions based on sound analysis.

  
  

• Efficiency: We can streamline the M&A process, saving clients time and resources.

  
  

• Value Maximization: Our goal is to help clients achieve the best possible deal terms and maximize the value of the transaction.

  
  

• Risk Mitigation: We identify and assess potential risks, helping clients avoid pitfalls and protect their interests.

  
  

• Local Market Knowledge: Given Bestar's presence in Asia, Gold House M&A possesses strong local market knowledge, which is vital for domestic and regional M&A.

In essence, Gold House M&A, operating under the Bestar umbrella, provides comprehensive M&A advisory services designed to guide businesses through every stage of the M&A lifecycle, from initial strategy to post-merger integration, with the backing of Bestar's broader financial and business advisory capabilities.

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