Global M&A Market Set for Strong Rebound in 2025, Bain & Company Report Finds

Maryam Pervez -

After three years of sluggish mergers and acquisitions (M&A) activity, the global M&A market is poised for a resurgence in 2025, according to Bain & Company’s latest Global M&A Report.

The report attributes the expected rebound to easing interest rates, regulatory shifts, and a growing need for businesses to adapt to technological disruption and post-globalization challenges.

M&A Gains Traction Amid Economic Uncertainty

Despite persistent economic volatility, shifting supply chains, and geopolitical tensions, companies are increasingly turning to M&A as a strategic tool for expansion, consolidation, and innovation.

According to Les Baird, Partner and Global Head of M&A and Divestitures at Bain & Company, M&A activity is cyclical and 2025 is expected to mark a turning point:

“While we saw a modest recovery last year, deal value remains historically low as a percentage of global GDP. However, as market headwinds ease, more companies will re-enter the dealmaking landscape.”

Key Drivers of the M&A Upsurge

Bain’s report highlights several factors fueling the M&A resurgence:

  • Technology Disruption: Generative AI, automation, quantum computing, and renewable energy are driving strategic acquisitions.
  • Regulatory Easing: New policies in the EU and US are expected to foster a more favorable M&A environment.
  • Private Equity Resurgence: Financial sponsors, including private equity firms, are eager to deploy capital as markets stabilize.
  • Asset Pipeline Growth: Corporations reassessing strategies, PE firms seeking liquidity, and distressed asset sales are fueling a strong pipeline for dealmaking.

Generative AI Transforming M&A Processes

The report reveals a rising adoption of generative AI to optimize M&A transactions.

A survey of 300+ M&A professionals found that:

  • 21% already use AI in dealmaking (up from 16% last year).
  • One-third expect to integrate AI into their M&A strategies by the end of 2025.

According to Baird, AI will reshape every stage of the M&A process, from deal sourcing and due diligence to integration planning:

“AI will drastically accelerate traditional processes, enabling firms to complete integration and divestiture planning in a fraction of the time.”

Middle East: A Rising M&A Powerhouse

The Middle East emerged as a key player in global M&A, with deal values surging 52% in 2024 to reach $29 billion.

Sovereign wealth funds and government-backed entities in the UAE and Saudi Arabia dominated the region’s M&A activity, particularly in:

  • Energy & Natural Resources – Nearly 80% of regional deal value.
  • Advanced Manufacturing & Technology – Attracting significant investments.

Major Transactions:

  • Saudi Aramco’s $8.9 billion acquisition of Rabigh Refining & Petrochemical.
  • Cross-border acquisitions in Europe surged by 120%, reflecting a strategic shift toward European investments.

Meanwhile, Asia-Pacific investments dropped by 78%, indicating a change in Middle Eastern investor focus.

“With continued government backing and strong cross-regional investments, the Middle East is set to drive high-value strategic acquisitions,”

said Gregory Garnier, Partner and Head of Bain’s Private Equity and Sovereign Wealth Fund Practice in the region.

Bain’s report outlines key industry trends shaping the global M&A market:

  • Energy & Natural Resources – Hit a record $400 billion in 2024, fueled by oil & gas consolidation and portfolio reshaping.
  • Financial Services – $309 billion in M&A deals, with banks scaling up and insurers focusing on fraud prevention and identity security.
  • Consumer Products – 19% drop in M&A activity, as firms prioritize divesting low-growth assets.
  • Retail – After regulatory hurdles, the sector rebounded, with 75% of retail executives planning more acquisitions in 2025.
  • Media & Entertainment – Traditional media giants consolidating to compete with Big Tech.

Outlook for 2025

With regulatory and financial pressures easing, M&A is expected to gain momentum in 2025, driven by:

  • Tech-driven acquisitions.
  • Strategic realignments in key industries.
  • Growing investor confidence in stabilizing markets.

As companies seek to navigate an evolving global landscape, M&A will remain a critical tool for growth and transformation.

With the Middle East playing an increasingly pivotal role, 2025 is shaping up to be a landmark year for dealmaking.

News Source: Gulf Business