Global M&A Surges to $2.6 Trillion - Fueled by AI and Growth

Global mergers and acquisitions have experienced a significant revival, with total deal value reaching $2.6 trillion in the first seven months of 2025. This marks the strongest performance for this period since the post-pandemic high of 2021. A renewed appetite for expansion in corporate boardrooms, coupled with a transformative surge in artificial intelligence, has helped override prevailing concerns about U.S. protectionist measures and broader geopolitical tensions.

Fewer Deals, But Bigger Bets

Although the number of transactions as of August 1 has declined by 16% year-over-year, the overall value has climbed by 28%, according to data from Dealogic. This divergence is largely attributed to a handful of mega-cap deals exceeding the $10 billion threshold. Notable among these are Union Pacific Corp’s proposed $85 billion takeover of Norfolk Southern and the $40 billion capital infusion into OpenAI, spearheaded by Japan’s SoftBank Group. These blockbuster transactions have reinforced the narrative that fewer, high-conviction deals are shaping the M&A landscape in 2025.

Shifting Market Sentiment Amid Political Uncertainty

The resurgence in activity offers a measure of relief for investment bankers who entered the year expecting a robust deal pipeline under President Donald Trump’s administration. Early optimism was tempered by tariff shocks and elevated geopolitical risk, prompting hesitation across corporate America. However, the climate has shifted decisively in recent months. Improved clarity on anti-trust enforcement and a more growth-oriented tone in boardrooms have reignited strategic confidence. Executives are increasingly viewing the current environment as conducive to long-term consolidation plays.

The AI Arms Race Is Fueling Strategic Urgency

Artificial intelligence has emerged as a central driver of current M&A momentum. Corporations are scrambling to secure their position in what is widely seen as a foundational shift in technology and business operations. As one senior investment banker observed, clients are more concerned than ever about falling behind in the AI race. While 2021 set a record with $3.57 trillion in global deals as markets rebounded from pandemic disruptions, 2025’s total so far remains about $1 trillion lower. Yet major players like JPMorgan Chase believe the second half of the year holds significant upside, with larger transactions anticipated as companies adjust to persistent volatility.

Tech and Electronics Eclipse Healthcare in Sector Leadership

In the years following the pandemic, healthcare dominated M&A headlines. But recent data shows a structural shift, with the computer and electronics sectors taking centre stage, particularly in the U.S. and U.K. According to Dealogic, the volume of deals in these industries has surpassed healthcare over the last 24 months, signalling a reallocation of capital toward more tech-centric growth opportunities.

Infrastructure and Cybersecurity See Elevated Deal Activity

AI’s ripple effect is being felt not just in software, but in the physical infrastructure that supports it. M&A interest has surged in areas like data centre cooling, exemplified by Samsung’s $1.7 billion acquisition of Germany’s FlaktGroup. Meanwhile, rising cybersecurity threats driven by AI advancements have led to landmark deals such as Palo Alto Networks’ $25 billion acquisition of Israeli firm CyberArk, the largest transaction so far in the EMEA region. These moves underscore how technological risk and resilience are now strategic imperatives.

Private Equity Returns with Renewed Aggression

Private equity firms, which had largely been on the sidelines during the initial phases of economic uncertainty, have re-entered the fray with renewed vigour. Sycamore Partners' $10 billion deal to privatize Walgreens Boots Alliance and the competing bids by KKR and Advent International, totalling £4.8 billion, for U.K.-based Spectris highlight the sector’s resurgence. The reactivation of private equity reflects improved access to financing, stronger exit environments, and a recalibration of valuation expectations.

The United States Leads, But Asia Pacific Gains Ground

The United States continues to dominate the global M&A landscape, accounting for more than half of all deal volume. However, the Asia Pacific region is fast catching up. Deal activity in Asia has doubled compared to the same period last year, surpassing the pace of growth seen across Europe, the Middle East, and Africa. This regional dynamism is being driven by liberalizing capital markets, digitization, and the strategic ambitions of Asian conglomerates and sovereign wealth funds.