A report from a Kendal-based accountancy firm predicts a rise in merger and acquisition (M&A) activity in 2025.
The study by MHA, in partnership with Baker Tilly International, suggests this growth will be driven by stabilising economic conditions, technological innovation, and a "heightened corporate appetite for strategic growth."
According to the firm, despite ongoing geopolitical uncertainties, the 2025 Global Transaction Report from MHA offers a "cautious optimism" for increased deal-making activity.
This optimism is attributed to a reduction in interest rates across key markets and a gradual improvement in investor confidence.
According to the report, around 67 per cent of Baker Tilly's global corporate finance experts predict a moderate increase in global M&A activity over the next 12 months, with about 16 per cent expecting a significant rise.
Despite facing economic challenges, the UK market is expected to see increased M&A activity in 2025, particularly in resilient sectors such as technology and professional services.
The report indicates that while inflationary pressures and regulatory uncertainties persist, deal volumes are expected to increase as businesses pursue strategic growth opportunities and private equity firms continue their activity in the mid-market segment.
Andrew Feeke, head of corporate finance at MHA, the UK and Ireland member firm of Baker Tilly International, said: "The global transactions market last year was defined by ongoing uncertainty.
"Geopolitical unrest and sluggish economic growth weighed heavily on M&A activity levels.
"However, a reduction in interest rates across many markets as a result of lower inflation offered a much-needed boost in the second half of 2024.
"Technology is increasingly driving the M&A process, with advanced analytics, AI, and data visualisation tools transforming due diligence.
"Sustainability continues to be a significant factor, with companies that align with global ESG trends commanding premium valuations.
"We also see renewed interest in buy-and-build strategies, particularly in fragmented industries where consolidation can unlock synergies and market share gains.
"The outlook for 2025 is filled with opportunities, but success will require a proactive and innovative approach."
Despite challenges including geopolitical unrest in the Middle East and Ukraine, along with sluggish European economies, the US market is expected to see a short- to medium-term increase in M&A activity, which could have an impact on other major economies such as the UK.
The push for digital transformation, innovation, and automation across industries is prompting companies to acquire advanced technologies and intellectual property to stay competitive.
A comprehensive analysis of global transactional trends and projections for 2025 can be found in the full 2025 MHA Global Transaction Report, available on the MHA website.
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