Headlines at a glance
Global deal value rebounded in H1 2025, powered by more megadeals, even as overall deal counts stayed low. North America led by value. Europe improved on both value and activity.
Rates are easing from 2024 peaks, improving financing logic. Fed funds are at 4.25–4.50 percent with markets expecting cuts in September. The Bank of England’s Bank Rate is 4.0 percent. The ECB held steady this week.
Private equity exits remain tight. Continuation vehicles hit record levels as sponsors hold assets longer and IPOs remain thin.
United States
Activity and value
North American deal value reached roughly 1.04 trillion dollars in H1 2025, up about 17 percent year on year, driven by larger transactions rather than volume. Global value for the first half rose strongly while deal counts fell to multi-year lows.
Drivers
Board appetite for scale deals is back, helped by a clearer rate path and AI-linked growth theses in tech and infrastructure.
Tariff uncertainty in Q2 muted signings and delayed some cross-border deals, although structures are adapting and momentum improved into summer.
Outlook
Surveys show most US dealmakers expect 2025 to beat 2024. Expect continued strength in large-cap corporate deals, selective PE take-privates where financing pencils.
Europe
Activity and value
Europe is on course for its busiest year in a decade by deal count, helped by lower valuations and a friendlier monetary backdrop. Q2 saw more than 5,200 deals, with value around 256 billion dollars.
Financial services deals rebounded. H1 2025 saw a rise in European FS deal count and a jump in disclosed value on the back of more billion-plus transactions.
Regulatory climate
The ECB kept rates unchanged in September, keeping credit conditions broadly stable. The Commission is reviewing merger rules, and DMA enforcement continues to shape digital deals.
Outlook
Global volumes remain down but values are up, with Europe bucking the volume trend. Expect more domestic and near-market combinations that are less sensitive to tariff risk.
United Kingdom
Activity signals
UK dealmaking is mixed by sector. Public M&A interest remained solid coming into 2025, though macro and tariff noise created timing friction for signings. Healthcare showed resilience while insurance distribution volumes were uneven.
Rules and review practice
New UK merger control thresholds took effect on 1 January 2025, including a one-party test and changes to turnover and share-of-supply. The CMA is consulting on guidance updates aligned to its new mergers charter. These changes raise the likelihood of UK filings for more deals, including tech and data-rich targets.
Rates and macro
Bank Rate is 4.0 percent after the August cut. Markets expect the MPC to hold in September. Slower growth is tempering revenue synergies but cheaper debt helps model accretion.
What is getting financed and why
- Large-cap strategic deals where cost take-out and platform logic are clear, notably in US tech, infrastructure and industrials.
- European financial services consolidation, including banking and wealth platforms.
- Cross-border Europe-to-US acquisitions to diversify tariff risk and lock in dollar cash flows.
Private equity reality check
Funds are executing more GP-led secondaries and continuation vehicles to bridge exit gaps, reflecting a still-narrow IPO window and valuation mismatches. Expect more minority recaps and structured equity in H2.
Execution watch-outs for Q4 2025
- Tariff and trade policy can shift diligence assumptions overnight for cross-border deals. Build pricing flex and conditionality into SPA terms.
- UK merger control captures more deals than before. Early CMA engagement and clean data rooms shorten timetables.
- DMA and EU antitrust scrutiny for digital and data-heavy targets remains elevated. Pre-notification strategy matters.
- Financing is easier than 2024 but still sensitive to spreads. Avoid tight covenants that assume rapid synergy realisation given growth softness in the UK.
Practical moves for dealmakers
- Prioritise US or eurozone targets with hard currency earnings and tariff insulation.
- In the UK, focus on bolt-ons where CMA risk is low and near-term cost synergy is proven.
- Use structured solutions for PE deals, including earn-outs, seller notes and minority pipes to bridge valuation gaps.
- Prepare a two-speed signing plan that allows timetable flexibility if policy headlines shift.
Sources
- Mergermarket / KPMG mid-year reports
- PwC M&A Outlook 2025
- ECB, Bank of England, US Federal Reserve statements
- UK Competition and Markets Authority merger control updates
- Bloomberg, Financial Times and Reuters reporting on H1 2025 deal values
