Global M&A deals hit $4.8bn on strong tech and AI deals

19/12/2025 03:26 AST

A potent rebound in global M&A is on track to deliver the second-highest total deal value on record in 2025, at a projected $4.8 trillion for the year, up 36% versus 2024, according to a report by Bain & Company.

A wave of megadeals worth $5 billion or more propelled the year's resurgence in deal-making, as companies classed as 'infrequent acquirers', taking part in M&A relatively rarely, came off the sidelines to make big bets, with 2025's expected M&A deal count up by only 5%, despite the overall surge in total deal value.

Deals worth $5 billion-plus contributed 75% of strategic deal value growth, with most of these - around 60% - by infrequent acquirers, and around two-fifths being transformative in scale, with a value of more than 50% of the acquirer's market capitalization.

These big bets on large-scale, transformational mergers are potentially both high-risk and high reward for acquiring companies, requiring their leaders to put outsized focus on strategic and organizational integration and alignment to create and secure value, Bain's analysis cautions.

Technology M&A, powered by AI-related deals, was in the vanguard of the year's surge in merger activity. But the powerful revival in M&A is broad-based across industries and geographies, as well as classes of dealmakers, Bain's report finds, with deal value across all regions and industries rising by double-digit percentages.

"Companies across industries are seeing an urgent need to reboot strategy. Amid improved deal market conditions, with both buyers and sellers more confident about valuations, strategic buyers are again putting M&A front and center to drive business growth. The number one reason for increased dealmaking was M&A's central role in strategy, according to our survey of more than 300 M&A executives," said Suzanne Kumar, the Executive Vice President of Bain & Company's M&A and Divestitures practice.

"We see important implications from the dealmaking rebound. This was a year of big bets by companies that traditionally make few deals, and often large-ticket deals become make-or-break moves. Big deals grounded in sound strategy can transform a business and set a new growth trajectory. But deals for less-strategic reasons can be a recipe for value destruction. It's impossible to overstate the importance to value-creation of clear and early answers to fundamental questions on factors such as shared vision, operating models, decision-making and execution and culture," she stated.

Broad-based resurgence in dealmaking
Tech M&A is back in force in 2025, with deal value up more than 76% to $478 billion in the year-to-date. Notably, almost half of strategic technology deal value for deals larger than $500 million for the year so far involved AI-native companies or deals that cited AI benefits.

Advanced manufacturing was also a major driver of dealmaking, with value up 38% to $717 billion in the year-to-date.

Against the backdrop of the overall 36% rise in deal value expected for 2025, activity among all classes of dealmakers was sharply higher, with deal value up by 38% for strategic transactions, by 31% among financial investors, and by 28% among venture capital players.

Easing regulations, capital costs drive the rebound
A host of factors are identified by Bain's analysis as driving this year's new wave of M&A as companies took the decision to buy to grow and respond to changing profit pools. Many of the headwinds for M&A during the post-pandemic years have calmed, while regulations as well as the cost of capital have eased, Bain notes.

The buyer-seller gap for valuations has also eased, with valuations up a turn to 11.6x EV/EBITDA, but remaining below 2021 peak levels in most industries, today's report says.

Tariffs, trade turbulence fail to stall the deal revival
Uncertainties over tariffs and trade turbulence had a muted impact meanwhile, with an early pullback in dealmaking in April proving to be short-lived. The rate of cross-border deals has not changed substantially in 2025 and fewer than half of M&A executives surveyed by Bain said trade restrictions would impact their overall deal plans, while 70% said trade policy would not affect divestiture plans.

But while post-globalization trends did not have a large impact on M&A in 2025, Bain suggests it will have bigger effects over time, with early hints seen as non-US companies show a weaker appetite for US-based assets and US buyers become more likely to pursue domestic deals due to tariffs, according to Bain research.

Post-globalisation and increased protectionist policies are also likely to impact capital allocation to M&A, the report adds.

With companies confronting costs for building resiliency into supply chains and investing in AI capabilities, automation and their technology infrastructure, M&A executives will likely face greater scrutiny on capital allocations to dealmaking and potentially a higher bar for deal ROI.

Despite the strengthened dealmaking in 2025, capital allocations to M&A were at a 10-year low this year, accounting for just 7% of cash expenditures by almost 700 S&P World Index companies, versus a 9% to 17% range of the prior nine years.

The decline in companies' capital spending on deals comes as other investment priorities, on everything from tech stacks, robots and AI to factories and energy farms crowd out M&A, Bain notes.

AI spreading across the M&A landscape
In a year marked by AI's rampant advancement, artificial intelligence was seen everywhere in the deal-making landscape. 75% of strategic acquirers have assessed the impact of AI on their target's business, while at least 20% had walked away as a consequence, Bain finds.

Alongside, use of AI by M&A executives more than doubled to 45% of practitioners. While deal sourcing and screening are still AI's main uses for M&A, more dealmakers have also begun relying on the technology for other functions such as planning and executing integrations.

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