M&A Outlook Points to Accelerating Deal Flow

March 14, 2025 – The global mergers and acquisitions landscape is poised for a gradual recovery following three years of subdued deal activity, according to Bain & Company’s newly released Global M&A Report 2025. While persistent macroeconomic headwinds, including high interest rates and regulatory scrutiny, dampened dealmaking last year, the outlook for 2025 suggests renewed optimism.

Bain’s analysis highlights shifting dynamics in M&A, with companies adapting to a new dealmaking environment that prioritizes scale transactions, accelerated synergy realization, and generative AI-driven efficiency.

The total global M&A market saw a 15 percent increase in deal value year-over-year in 2024, reaching approximately $3.5 trillion. Corporate transactions rose 12 percent, while financial acquisitions surged by 29 percent, driven in part by private equity’s return to the deal table. Despite these improvements, according to Bain, deal volume remains significantly lower than pre-pandemic levels.

Slow but Steady Rebound

“Over the past three years, global M&A as a percentage of nominal GDP has lingered at nearly 30-year lows,” the report noted. “Even when considering the cyclicality of the market’s peaks and troughs, the total M&A market in 2024 ended slightly up year over year (13 percent in value, nine percent in volume) for the second-lowest level of value and volume in more than a decade.”

Related: Hunt Scanlon Ventures Forecasts Strong Year Ahead for Recruiting Sector Dealmaking

Key barriers to deal activity included valuation mismatches between buyers and sellers, prolonged regulatory approvals, and high borrowing costs. However, an easing of these constraints in 2025 could accelerate deal flow.

Scale Deals

One of the most significant shifts in M&A strategy has been the prioritization of scale deals, particularly in industries with high fixed costs such as energy, financial services, telecoms, and retail. According to Bain, scale deals accounted for 59 percent of the largest strategic transactions last year, marking a distinct reversal from the previous focus on scope M&A.

Forces Shaping the 2025 Dealmaking Boom

The latest EY Merger Monthly forecasts an uptick in U.S. M&A activity, driven by favorable macroeconomic conditions, regulatory shifts, and an increasing appetite for strategic deals. “U.S. M&A activity is expected to build further momentum in 2025,” the report notes, “driven by falling interest rates, strong economic expansion, substantial uninvested capital, and the imperative for business transformation.” Despite concerns over regulatory scrutiny, EY predicts that dealmakers will benefit from a clearer policy environment. “With dealmakers having better clarity around the monetary and regulatory dynamics, there has been a significant rise in CEOs’ appetite to engage in M&A,” EY analysts concluded.

Evan Berta, an associate at Hunt Scanlon Ventures who closely tracks developments across the human capital M&A landscape, said that he has seen a demonstrable shift in transaction flows which will translate into a record boom in deals this year for the Greenwich, Conn-based global M&A advisory firm. “We are seeing an increased flow of transactions emanating from a broader swathe of human capital providers,” he said. “Our internal market intelligence is now pointing to a broadening of the pipeline globally,” said Mr. Berta. “Buyers and sellers are re-engaging with more confidence than we have seen since 2022 when the sector was tearing the cover off the ball.”

“Instead of the traditional approach of primarily capturing cost synergies in scale deals and revenue synergies in scope deals, companies needed to deliver both to attract dealmakers,” the report noted. “For example, the $35 billion Capital One–Discover merger aimed to deliver revenue synergies with a new customer segment as well as economies of scale with combined payment systems.”

Related: Hunt Scanlon Ventures Serves as Strategic Advisor in ZRG’s Acquisition of Aspen Leadership Group

With interest rates remaining elevated, companies are pressured to extract value faster. This has led to increased emphasis on pre-close integration planning to execute on synergies immediately upon deal closure.

Enter Generative AI

A key theme in Bain’s report is the increasing use of generative AI to enhance M&A efficiency. AI is being leveraged across various stages of the deal cycle, including target screening, due diligence, and post-merger integration.

According to Bain’s 2025 M&A Practitioner Survey, 21 percent of M&A professionals currently use generative AI, with more than 50 percent expected to adopt it by 2027. AI is being deployed to reduce manual effort, accelerate diligence timelines, and improve synergy estimates.

“Within the next 12 months, we expect early adopters will use generative AI tools to draft integration workplans and transition service agreements (TSAs) in less than 20 percent of the time that they previously spent on such activities,” Bain reported.

Looking Ahead

Despite ongoing challenges, Bain’s outlook for 2025 is cautiously optimistic, citing potential interest rate cuts, regulatory clarity, and pent-up demand for dealmaking as catalysts for growth.

Related: Winning Through M&A: The Remarkable Habits of Successful Dealmakers

Companies that align their M&A strategy with emerging trends – scale transactions, AI integration, and rapid synergy realization—will be best positioned to capitalize on the evolving deal landscape.

“Strategic dealmakers will look beyond near-term swings in market momentum to find the right deals to be competitive, profitable, and enable sustainable growth,” said Bain. For dealmakers and investors, 2025 may very well mark the beginning of a more dynamic M&A cycle.

Reprinted from with permission from ExitUp!

Contributed by Scott A. Scanlon, Co-CEO, Leo Cummings, Editor-in-Chief, ExitUp