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Global M&A volumes YTD jumps 15% to $3.45 trillion

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Private equity-led buyouts up 35%

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M&A outlook buoyed by hopes of deregulation, lower taxes

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Dealmakers see activity levels above 10-year average in

2025

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Technology M&A volumes jump 20% to touch $534 billion

By Anousha Sakoui, Anirban Sen and Kane Wu

LONDON/NEW YORK/HONG KONG, Dec 19 (Reuters) - Bankers

expect global deal volumes to surpass $4 trillion next year, the

highest in four years, buoyed by U.S. President-elect Donald

Trump's promise of less regulation, lower corporate taxes and a

broadly pro-business stance.

The total value of mergers and acquisitions (M&A) rose 15%

from last year to total $3.45 trillion as of Dec. 19 this year,

according to Dealogic data, recovering from a decade-low of

about $3 trillion during the same period last year.

Top dealmakers expect a more deal-friendly antitrust

enforcement in the U.S. next year to unshackle tie-ups that were

put on hold under the Biden administration. Trump recently named

Andrew Ferguson to replace Lina Khan as the chair of the Federal

Trade Commission, appointing a current Republican member of the

agency who is expected to ease up on policing of large corporate

mergers.

"Setting aside 2021, next year could be one of the best of

the last 10 years because there wasn't a lot of volatility in

volume over the last decade. If global M&A volumes are up 15% or

20% next year, it wouldn't be a surprise to us at all," said Jay

Hofmann, co-head of M&A for North America at JPMorgan Chase.

M&A volumes in the United States climbed 10% to $1.55

trillion so far this year, while Europe and Asia Pacific saw a

22% and 11% jump respectively, with volumes hovering around the

$800 billion mark.

Recent interest rate cuts, an improved financing environment

and a pickup in initial public offerings are expected to lift

the fortunes of private equity firms, who were unable to sell or

list portfolio companies worth several billions of dollars

during the last two years when buyers and sellers were unable to

agree on the price of assets and equity capital markets were

largely shut for big IPOs.

"The IPO market is improving and that really helps some of

the larger assets that are in sponsor portfolios for which that

may be the only monetization outlet," said John Collins, global

co-head of M&A at Morgan Stanley.

Leveraged buyout volumes jumped 35% to $600.8 billion this

year, as private equity firms braved challenging market

conditions to take several companies private, while also

clinching takeovers of large targets. Blackstone's $16

billion acquisition of Australian data center operator AirTrunk,

and Silver Lake's $13 billion take-private of entertainment

conglomerate Endeavor Group ( EDR ) ranked as the top LBOs of

the year.

Some investment bankers warned planned tariffs under the

Trump presidency could prove to be a headwind for the U.S.

economy as that could drive up inflation. On Wednesday, the

U.S. central bank said more reductions in borrowing costs hinge

on further progress in lowering stubbornly high inflation.

"There are a lot of views that the Trump administration is

going to open the flood-gates for deals. We see less of that and

we're a little bit more cautious on how much will change," said

Stephen Pick, head of M&A for EMEA at Barclays.

Mars' $36 billion takeover of Cheez-It maker Kellanova ( K )

; Capital One's $35 billion deal for Discover

Financial; and Synopsys' ( SNPS ) $35 billion takeover

of design software maker Ansys ( ANSS ) were the largest M&A

transactions of the year.

"Discussions around bigger deals is happening and will

continue to happen because the environment is going to be more

predictable (in 2025) than it has been in the recent

administration," said Krishna Veeraraghavan, global co-head of

the M&A group at Paul, Weiss, Rifkind, Wharton & Garrison.

LARGE DEALS BUOY VOLUMES

While the number of transactions worth over $10 billion grew

at a robust pace in 2024, the overall deal count fell from last

year as a tough regulatory environment and election-year

uncertainty forced companies to postpone their pursuit of

transformational tie-ups. Despite those headwinds, 37 deals

valued at more than $10 billion were announced, compared to 32

last year.

A booming U.S. economy, pent-up demand, and trillions of

dollars of unspent capital sitting on corporate balance sheets

should result in more deal activity in the near term, bankers

said. Top investment banks are starting to ramp up hiring to

ensure deal teams are fully staffed to handle the expected surge

in transaction volumes.

"With Trump lowering taxes and promoting deregulation,

companies may be more willing to invest their cash in M&A,

instead of distributing it to shareholders," said Nestor

Paz-Galindo, global co-head of M&A at UBS.

With the outlook for U.S. corporate earnings looking

brighter, cross-border M&A activity is also expected to improve

as cash-flush foreign buyers increasingly eye attractive U.S.

targets. Fast-growing economies in Asia are also increasingly

being viewed as attractive for opportunistic private equity

firms.

"Given their unique dynamics and tailwinds, Japan and India

both saw a growing focus from sponsors translating into strong

momentum in deal volume and we expect that to continue for both

markets in 2025 as sponsor M&A returns globally and in the

region," said Raghav Maliah, global vice chairman of investment

banking at Goldman Sachs.

Deal advisers noted that the rate of dealmaking heading into

2025 is starting to return to levels seen in the pre-pandemic

years of 2018 and 2019, when deal volumes averaged about $4

trillion a year.

A flurry of large deals have been announced in recent weeks,

including Omnicom's ( OMC ) $13 billion merger with rival

advertising giant Interpublic Group, and Arthur J

Gallagher's ( AJG ) $13.4 billion takeover of insurance broker

AssuredPartners.

"People who are predicting that everything's going to be

rolling from January are probably a bit overly optimistic. It's

all trending in the right direction. I'm not convinced we'll see

another (record) year like 2021 but I'm hopeful that it will be

a bit more like 2019 or 2020, right before COVID," said Daniel

Wolf, an M&A partner at Kirkland & Ellis.

The technology sector accounted for the largest share of M&A

activity this year, jumping more than 20% year-on-year to $534

billion globally.

"The types of deals that we're seeing in the works are of

the type that we saw fewer of over the last couple years and it

feels like there's a lot of excitement to do big,

transformational deals," said Mark Bekheit, global vice chair of

the M&A practice at Latham & Watkins.