Global M&A Activity Resilient Amid Tariff Challenges in 2025
In 2025, the landscape of global mergers and acquisitions (M&A) is showing remarkable resilience, even in the face of fluctuating tariffs that have shaken executive confidence. A recent midyear report by Bain & Company outlines significant insights into how companies are leveraging this volatility for strategic advantages.
According to the report, leading corporations globally are steadfast in their commitment to M&A activities this year, leveraging experiences from past crises such as the Covid-19 pandemic and economic downturns caused by rising interest rates. The unpredictability surrounding tariff policies has heightened the sense of uncertainty in decision-making processes regarding mergers and acquisitions. Yet, Bain's analysis indicates that this situation will be distinct from previous disruptions.
Executives are now inclined to pursue bold strategic initiatives, learning from the past and adapting to the evolving market dynamics. This adaptation manifests in a new wave of M&A dealmaking where firms are focused on future-proofing their operations, enhancing scale, and refining their strategic capabilities. Desirable outcomes include greater efficiencies, strategic divestitures, and navigation through the complexities of ongoing tariff ramifications.
Bain's report reveals that, despite initial declines in deal volume and value coinciding with the imposition of new tariffs, a recovery occurred in May, indicating the M&A market's inherent resilience. Through May, strategic M&A activity grew by 11% year-over-year, showcasing the eagerness of seasoned executives to capitalize on available opportunities. This resilience suggests that executive leaders remain focused on developing robust M&A roadmaps that align with a long-term vision despite immediate pressures.
The report candidly acknowledges the existing challenges for dealmakers, noting that alongside tariff complications and market volatility, companies must navigate the accelerating pace of technological disruptions, particularly in the realm of artificial intelligence (AI). These disruptions are creating a vital need for innovative capabilities—an opening for strategic acquisitions. Bain predicts that AI integration will continue to spur demand for essential assets across various sectors.
Furthermore, the report stresses that high-interest rates and inflationary factors will likely persist, and regulatory scrutiny is more pervasive than ever, particularly in the U.S. antitrust landscape. Different sectors are experiencing the impacts of tariffs in varied ways—industrials are seeing a more pronounced decline, while technology firms venture into aggressive acquisitions to obtain AI-related assets.
To overcome these obstacles, Bain identifies four fundamental learnings from past downturns that successful companies apply when forging their M&A strategies. Firstly, the proactive pursuit of M&A, rather than a passive approach, tends to yield higher performance. Companies that capitalize on isolated market conditions tend to thrive, even taking bold steps during economic downturns, as observed during the financial crisis of 2008.
Secondly, forward-thinking firms recognize that unforeseen disruptions create a demand for new capabilities, leading to a rationalization for scope deals. The ongoing advancements in AI present fresh opportunities for companies to acquire game-changing capabilities necessary for future growth.
Thirdly, Bain anticipates that consolidation efforts will dominate the M&A landscape for the remainder of the year. Industries with fixed high costs, particularly financial services, energy, and telecommunications, are likely to pursue such deals, as companies aim to strengthen their market positions in the face of persistent cost pressures.
Finally, leading companies will continually seek to refine their competitive edges by understanding the ramifications of tariffs on their portfolios and investment plans. By adapting their business models to align with anticipated shifts in global markets and consumer behavior, these firms remain agile and vigilant to redefine their strategic pathways. Companies will also assess divestments of non-core assets to streamline operations for maximum efficiency moving forward.
As the future unfolds, Bain & Company’s report underscores the critical role that resilient strategies play in the sustainability of global M&A activities. Successful companies possess a deep understanding of their environments and are prepared to take calculated risks aligned with long-term success, defining the core of effective M&A endeavors for 2025 and beyond.
According to the report, leading corporations globally are steadfast in their commitment to M&A activities this year, leveraging experiences from past crises such as the Covid-19 pandemic and economic downturns caused by rising interest rates. The unpredictability surrounding tariff policies has heightened the sense of uncertainty in decision-making processes regarding mergers and acquisitions. Yet, Bain's analysis indicates that this situation will be distinct from previous disruptions.
Executives are now inclined to pursue bold strategic initiatives, learning from the past and adapting to the evolving market dynamics. This adaptation manifests in a new wave of M&A dealmaking where firms are focused on future-proofing their operations, enhancing scale, and refining their strategic capabilities. Desirable outcomes include greater efficiencies, strategic divestitures, and navigation through the complexities of ongoing tariff ramifications.
Bain's report reveals that, despite initial declines in deal volume and value coinciding with the imposition of new tariffs, a recovery occurred in May, indicating the M&A market's inherent resilience. Through May, strategic M&A activity grew by 11% year-over-year, showcasing the eagerness of seasoned executives to capitalize on available opportunities. This resilience suggests that executive leaders remain focused on developing robust M&A roadmaps that align with a long-term vision despite immediate pressures.
The report candidly acknowledges the existing challenges for dealmakers, noting that alongside tariff complications and market volatility, companies must navigate the accelerating pace of technological disruptions, particularly in the realm of artificial intelligence (AI). These disruptions are creating a vital need for innovative capabilities—an opening for strategic acquisitions. Bain predicts that AI integration will continue to spur demand for essential assets across various sectors.
Furthermore, the report stresses that high-interest rates and inflationary factors will likely persist, and regulatory scrutiny is more pervasive than ever, particularly in the U.S. antitrust landscape. Different sectors are experiencing the impacts of tariffs in varied ways—industrials are seeing a more pronounced decline, while technology firms venture into aggressive acquisitions to obtain AI-related assets.
To overcome these obstacles, Bain identifies four fundamental learnings from past downturns that successful companies apply when forging their M&A strategies. Firstly, the proactive pursuit of M&A, rather than a passive approach, tends to yield higher performance. Companies that capitalize on isolated market conditions tend to thrive, even taking bold steps during economic downturns, as observed during the financial crisis of 2008.
Secondly, forward-thinking firms recognize that unforeseen disruptions create a demand for new capabilities, leading to a rationalization for scope deals. The ongoing advancements in AI present fresh opportunities for companies to acquire game-changing capabilities necessary for future growth.
Thirdly, Bain anticipates that consolidation efforts will dominate the M&A landscape for the remainder of the year. Industries with fixed high costs, particularly financial services, energy, and telecommunications, are likely to pursue such deals, as companies aim to strengthen their market positions in the face of persistent cost pressures.
Finally, leading companies will continually seek to refine their competitive edges by understanding the ramifications of tariffs on their portfolios and investment plans. By adapting their business models to align with anticipated shifts in global markets and consumer behavior, these firms remain agile and vigilant to redefine their strategic pathways. Companies will also assess divestments of non-core assets to streamline operations for maximum efficiency moving forward.
As the future unfolds, Bain & Company’s report underscores the critical role that resilient strategies play in the sustainability of global M&A activities. Successful companies possess a deep understanding of their environments and are prepared to take calculated risks aligned with long-term success, defining the core of effective M&A endeavors for 2025 and beyond.
Topics Financial Services & Investing）
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