Global dealmaking hits $2.6 trillion in 2025, boosted by AI and growth-focused M&A activity

Global mergers and acquisitions (M&A) have reached $2.6 trillion in value in the first seven months of 2025, marking the highest total since the pandemic-era surge in 2021. Despite a 16 per cent drop in the number of transactions compared to the same period last year, the overall value of deals has risen by 28 per cent, according to Dealogic data. The sharp increase in deal value is largely driven by large-scale “megadeals”, particularly in the United States, where deals exceeding $10 billion have been prominent. Key transactions fuelling this growth include Union Pacific Corp's proposed $85 billion acquisition of rival Norfolk Southern and OpenAI’s $40 billion funding round, led by SoftBank Group. These deals have helped offset the effects of previous geopolitical uncertainties, including US tariffs, and have given a significant boost to global dealmaking.

Shift towards growth-oriented deals amid political uncertainty

The sharp rise in M&A activity this year follows a period of uncertainty triggered by US President Donald Trump’s tariffs and the broader geopolitical climate. Companies initially held back from dealmaking as they navigated the turbulence created by these factors. However, as market conditions have stabilised and renewed confidence has returned to corporate boardrooms, deal rationale has shifted from defensive to growth-oriented.

While the pace of dealmaking is still below the historic highs of 2021, when pandemic-related rebounds led to a record-breaking $3.57 trillion in global deal value, the current surge signals renewed optimism. Despite a nearly $1 trillion gap compared to 2021’s record, financial industry insiders, including dealmakers at JPMorgan, believe that more large deals are on the horizon as executives adapt to ongoing market volatility.

AI and technology set to drive continued M&A activity

Technology and artificial intelligence (AI) are expected to remain key drivers of M&A activity in the second half of 2025. The increasing demand for AI solutions has led to a surge in deals within the computer, electronics, and data centre sectors. A notable example includes Samsung’s $1.7 billion acquisition of FlaktGroup, a German data centre cooling specialist, highlighting the importance of infrastructure that supports AI-driven data needs.

Cybersecurity has also been a significant focus, with Palo Alto Networks’ $25 billion deal to acquire Israeli cybersecurity company CyberArk, marking the largest deal in the Europe, Middle East, and Africa (EMEA) region this year. The growing threats posed by AI-driven cyberattacks are pushing companies to bolster their defence strategies, further fuelling the demand for M&A in this space.

Private equity has also re-entered the scene, which had previously been sidelined during the early stages of the pandemic. For instance, Sycamore Partners made a $10 billion offer to take Walgreens Boots Alliance private, while private equity firms KKR and Advent made competing offers for UK-based scientific instrument maker Spectris.

US dominates M&A market as Asia Pacific overtakes EMEA

The US remains the largest market for M&A, accounting for more than half of the global deal activity. However, Asia Pacific has shown remarkable growth, with dealmaking doubling compared to the same period last year, surpassing the EMEA region in the process. This trend underscores the increasingly dynamic role that Asia-Pacific economies are playing in global M&A.

Despite the challenges posed by ongoing uncertainty, the global M&A landscape remains resilient, with many companies focused on securing growth opportunities, particularly in the technology and AI sectors. As the year progresses, dealmakers expect further large-scale transactions, especially as businesses continue to adjust to the evolving global economic environment.

(With inputs from agencies)