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The M&A outlook for 2025 looks promising. Globally, leading financial advisers including Goldman Sachs, J.P. Morgan and Morgan Stanley are all in agreement that the market for mergers and acquisitions will continue its upward trajectory this year.

The UK is central to this trend. Experian’s recently published 2024 M&A Review shows that there were 7,492 transactions announced last year; an increase of 11% from the 6,762 deals agreed in 2023 and the UK’s highest annual number of M&A deals since 2018.

What’s driving this increase in activity? And if M&A is on your mind, what steps can you take to capitalise on this flourishing market and smooth your path to M&A success?

What’s happening in the M&A market?

If we look at M&A trends, the market definitely seems to be buoyant. And while this is true, looking back at M&A activity by year provides some context.

Data shows that global M&A activity reached a record high in 2021, with over 58,000 deals globally. 2021 also saw the peak of M&A deal values – over US$5.2 trillion – with this huge number powered by nearly 1000 ‘mega-deals’ (deals of US$1bn and above) which accounted for US$3.7bn.

This is mirrored in the UK, where 2021 saw the highest M&A activity by volume (with 2018 seeing the highest deal value).

In 2022, M&A activity dropped off, a trend that continued in 2023. The first half of 2024 continued this fallow period; PwC’s mid-2024 report noted a ‘precipitous decline’ in M&A activity driven by a combination of high interest rates, a view that companies were overvalued, and geopolitical uncertainty.

But whatever the landscape, private equity firms have to make deals. PwC cites Pitchbook data showing that at the start of 2024, PE firms held more than 27,000 portfolio companies globally, about half of which had been on their books for at least four years – and as a result, are under pressure from investors to sell.

M&A trends 2024

This pent-up demand, coupled with corporates’ desire to grow or expand into new areas – for example, to instantly add AI expertise to their portfolio – drove an uptick in M&A in the second half of 2024.

In Q4 2024, the UK saw what Experian describes as “a surge in deal activity…a significant acceleration that shifted the UK M&A market into growth territory year on year”.

As a result, across the whole year, the UK saw 71 so-called mega deals – almost double the 37 recorded in 2023, with total 2024 UK deal value sitting at £287bn, an increase of 44% year on year.

In terms of industry, infocomms led the way, seeing 1770 UK M&A deals in 2024, with professional services, manufacturing, wholesale and retail, and financial services also seeing strong deal volumes.

The M&A outlook for 2025

The biggest M&A advisors are all in agreement: 2025 promises to continue on this upward path. Goldman Sachs believes that “M&A is building momentum on a global stage”. J.P. Morgan believes the “outlook for 2025 remains positive”, with dealmaking “set to thrive on innovation and global opportunities”.

This trend includes the UK and Europe where M&A growth is also predicted to continue, with PwC noting that UK deal volumes are outperforming the wider EMEA region by a considerable margin.

Why are mergers and acquisitions predicted to increase in 2025?

M&A advisors and experts cite a number of reasons for this revved-up market:

• A regulatory market that’s more favourable to mergers and acquisitions. P. Morgan believes that a “more streamlined regulatory framework” will enable a “more predictable, truncated approval process”, speeding M&A activity.Goldman Sachs notes that with the “key M&A bottlenecks of monetary policy and regulatory uncertainty addressed—at least directionally”, and the new U.S. administration expected to take a more relaxed stance on regulation, company confidence is growing.

  This confidence is having a direct knock-on effect on UK deals. It’s spurring M&A appetite, but with valuations high in the U.S. and, as PwC note, the “weak pound and stable economic environment…a magnet for deals” here, many M&A deals are predicted to take place in the UK rather than U.S.

   

• Cross-border M&A is on the rise. Morgan Stanley points out that “economies have grown at different paces” which has led to ”some attractive valuations and appetite for diversification”. P. Morgan agrees that this “growth in historically lower cross-border countries” is “driving increased activity”.
• Financial sponsors are ready to transact. The pent-up demand noted above is creating a market where sell-side activity and take-private transactions are “poised to increase”, and with sponsors “tapping into a range of strategic levers to unlock liquidity” the type and range of deals is set to grow.As PwC say of the UK market, “a lot of PE investments are beginning to overstay their welcome”. In the UK and Europe, it’s predicted that this “pressure…for returns of capital will cause an uptick in dealmaking by sponsors.”

   

• Activism is increasingly driving corporate activity, both in acquisitions and separations. P. Morgan cites a growing globalisation of activists, whose focus on “valuation, corporate structure, capital allocation and governance” is influencing M&A. Goldman Sachs predicts that “recent successful campaigns by non-dedicated or lesser-known activist funds should embolden a broader set of activist players to join the fray”.
• AI is currently a huge driver of M&A, with businesses looking to speed growth and entry into new markets via acquisition. While dealmaking has to date focused on platform and infrastructure providers, Goldman Sachs anticipates that “AI’s true economic and transformational potential is expected to be unlocked in the Application layer” – and albeit this potential is not yet fully formed, it forecasts huge future M&A growth.

How are businesses responding to a rebounding M&A market?

On the buy side, and particularly on the sell side, companies are alive to this active market. In mid-2024, PwC noted an increase in activity among sellers, “with sale preparations mounting, full-potential business plans being developed and many vendor due diligence engagements already underway”.

If you want to capitalise on this predicted boom in M&A activity in 2025, what steps should you be taking?

“How do I prepare for M&A” is one of the first questions an organisation wishing to sell will typically ask. If you’re looking to prepare your business for sale, there are a number of steps necessary to prepare your business.

1. Ensure you’re ready for potential buyers by getting your documentation in order.If you’re a listed company, the production of M&A documentation can be complex. In addition to the main Offer or Scheme document, you’ll need to provide numerous ancillary documents for shareholders.

   Meticulous and timely logistical project management is essential – potential deals are time-critical, so you need to ensure you can provide the necessary information quickly when needed.

2. Consider how to share information with prospective buyers
   The M&A journey requires sensitive documents to be shared throughout the process. Many companies are realising the value of secure data rooms to house and share this information. 

   Choosing to share confidential files via an online data room gives you a secure, intuitive platform that makes collaboration easy for potential investors. At the same time, you get detailed activity tracking that allows you to fine-tune investor follow-up and messaging. Due diligence is made smoother, with simplified organisation of documents and access to them – enabling your team to focus on the details of deal-making rather than administration.

3. Seek expert support
   The M&A process is a complex one; understanding the regulatory landscape and logistical requirements is essential, but not simple.Luckily, there is expert support out there. By engaging a team of experts, ideally one that has supported a high number of the UK’s public M&A transactions, you will have experienced M&A support by your side at every stage.

   Navigating the complexities of personalisation, data management, and fulfillment can be daunting, but with expert help from a team who know what is needed, you can smooth and accelerate the M&A process.

The Perivan team has long-standing experience of supporting M&A transactions. We supported many of the UK’s public M&A transactions in 2024 and have strong relationships with all major Registrars.

We have by far the largest in-house financial document creation resource in the UK, delivering meticulous quality, competitive pricing and unrivalled service. Our Engage data room accelerates dealmaking via intelligent insight and impeccable security.

We know the M&A process inside out, and can support you every step of the way.

Find out why Engage is the UK’s fastest-growing data platform and contact us to see how we can help you with all aspects of your M&A activity. With Perivan’s help, you can capitalise on a growing M&A market in 2025.