How Dealmakers Are Thriving in an Age of Uncertainty
Despite swirling trade wars, interest rate whiplash, and geopolitical tensions, global mergers and acquisitions have surged to a staggering $2.6 trillion in 2025—the highest year-to-date total since the 2021 peak 5 . This resurgence defies conventional wisdom: while deal volumes fell 9% in H1 2025, deal values jumped 15%, revealing a striking paradox of fewer but far larger transactions 1 .
"The market spins new challenges, but we advocate doing the opposite: focus on thematics and bring your strategy to life"
Artificial intelligence has reshaped M&A priorities, with tech giants and industrial players scrambling for dominance:
Capital allocation has become a brutal trade-off: companies now weigh AI investments against traditional M&A. Microsoft, Meta, and others plan to spend $1 trillion+ on AI infrastructure through 2030—siphoning funds from potential acquisitions 1 .
Tariffs and trade policies have forced radical strategic pivots:
| Region | Deal Value | YoY Change | Dominant Sector |
|---|---|---|---|
| Americas | $724B | +23% | Energy |
| Europe | $201B | -14% | Financial Services |
| Asia-Pacific | $155B | -43% | Technology |
| Middle East | Not Disclosed | +13%* | Infrastructure |
With 30,000+ portfolio companies aging on their books (47% held since 2020), PE firms face unprecedented pressure:
M&A activity reveals stark industry winners and laggards:
Could acquiring supplier Toyota Industries Corp. for $44B accelerate Toyota's transition to an electric-and-AI-driven future while shielding it from tariff risks? 3
"Experienced acquirers create 2x more value in uncertain markets. Toyota's vertical integration playbook will define industrial M&A"
| Tool | Function | 2025 Innovation |
|---|---|---|
| AI-Driven Due Diligence | Target screening at 10x speed | Algorithms weighing 400+ geopolitical/tariff variables |
| Continuation Funds | PE exit pressure valve | Secondary markets for partial liquidity |
| Golden Shares | Mitigate regulatory risk | Government veto rights (e.g., Nippon Steel deal) |
| Earn-Out Structures | Bridge valuation gaps | 72% of deals now use AI-powered performance metrics |
| Acquirer | Target | Value | Strategic Rationale |
|---|---|---|---|
| Chevron | Hess | $53B | Guyana oil fields (11B+ barrels) |
| Union Pacific | Norfolk Southern | $85B | Rail network consolidation |
| Nippon Steel | U.S. Steel | $14.9B | Industrial capacity + U.S. market access |
| Sanofi | Dren Bio (DR-0201) | $1.9B | Next-gen cancer therapy platform |
| Wiz | $32B | AI-cloud security infrastructure |
As global M&A navigates what Deloitte calls "rougher waters," success hinges on strategic agility over brute scale 9 . The second half of 2025 promises a resurgence, with J.P. Morgan noting "increasing optimism about tariff resolution" 6 and BCG tracking a sentiment rebound in North America and Europe .
Yet the era of predictable dealmaking is over. Winners will resemble chess masters: leveraging AI-driven analytics, flexible structures like joint ventures (up 40% YoY), and geopolitical contingency planning. As PwC's Levy concludes, "Uncertainty is the new permanent state" 1 —and the most adaptable dealmakers are already capitalizing on it.