Mergers and acquisitions market explodes! By 2025, global transaction volume will hit the second-highest level in 40 years, with investment bank fees breaking historical records.

2025 marks a long-awaited “big year” for the global M&A market. According to data from the London Stock Exchange Group, the total value of global mergers and acquisitions reached $4.5 trillion this year, a nearly 50% year-over-year increase compared to 2024. This is the first time surpassing the $4 trillion mark since the M&A boom during the pandemic in 2021, and it is the second-highest level in over 40 years of statistical history.

Large-scale deals emerge intensively, reshaping industry landscapes

This year’s M&A market is most notable for the clustering of “mega” deals. A total of 68 transactions with a single deal size of at least $10 billion were announced this year, which is quite rare in history. Tony Kim, Co-CEO of Centerview Partners, said: “I haven’t seen such a large-scale M&A boom in the past decade. These big-ticket deals are genuinely changing the industry landscape, from media to industrial manufacturing, without exception.”

Among them, the two largest deals have attracted particular attention: Netflix’s bidding war with Paramount for Warner Bros. Discovery, and the merger of Union Pacific Railroad and Norfolk Southern Railway, which created a cross-continental railway giant valued at $250 billion. This echoes the M&A landscape of 2021—when the largest deals included the merger of Time Warner and Discovery, and Canadian Pacific Railway’s $31 billion acquisition of Kansas City Southern.

Funding channels are smooth, regulatory environment is friendly

The reason why companies dare to initiate such large-scale deals is supported by three main factors. First, ample financing channels remain open; second, the relatively relaxed regulatory policies in the U.S. provide strong support; third, market risk appetite remains robust. Mark McMaster, Head of Global M&A at Lazard Group, pointed out: “The current antitrust regulatory environment provides full support, and the financing environment is also very favorable, so we are seeing a ‘comprehensive push’ by companies.”

It is worth noting that the deregulation policies promoted by the Trump administration encouraged companies to explore M&A opportunities that had been previously shelved due to concerns. Although the “D-Day” full tariff policy announced in early April temporarily interrupted growth momentum, M&A activity rebounded quickly, ultimately achieving the first two consecutive quarters in four years with transaction volumes exceeding $1 trillion. Daniel Mendelow, Co-Head of U.S. Investment Banking at Evercore, said: “As the impact of tariffs diminishes, the pent-up demand for M&A is gradually released, and the growth momentum is established and continues to strengthen.”

U.S. market takes center stage, investment bank fees hit new highs

U.S. companies are particularly active in acquisitions, with total deal value targeting U.S. firms reaching $2.3 trillion, the highest since 1998. This activity directly boosted investment bank revenues—estimated fees reached $135 billion, a 9% increase from last year, with more than half coming from the U.S. market, marking the second-highest level in history.

Big deals are booming, small deals cool off

Interestingly, the prosperity of large deals contrasts sharply with the decline in small deals. Overall, the number of M&A transactions decreased by 7% this year, the lowest since 2016. This indicates a “polarized” market—leading companies capable of executing large mergers are thriving, while small- and medium-sized deals are facing cold reception.

Private equity gradually recovers, large privatization deals emerge

Private equity M&A recovery has lagged behind the overall market, with deal volume increasing just over 25%, reaching $889 billion. However, some highlights have appeared—the largest privatization deal was led by the Saudi Public Investment Fund, in partnership with Silver Lake Capital and Jared Kushner, acquiring video game developer Electronic Arts for $55 billion. Anu Aiyengar, Head of Global Advisory and M&A at J.P. Morgan, said: “There is a common perception that financial investors are not very active, but this year, several large privatization cases have emerged. Despite U.S. stocks reaching record highs, there are still irrationally priced investment opportunities, and diversified financing channels support large-scale transactions.”

Meanwhile, large IPO activities by companies such as Medline, a medical supplies group, and security services firm Verisure, are heating up, opening new paths for asset sales and injecting new vitality into the private equity industry.

Future outlook: financial investors are just getting started

Andre Kelleners, Co-Head of European Investment Banking at Goldman Sachs, expressed optimism about the future: “The M&A market still has room for further growth in the coming years. We firmly believe that the M&A boom among financial investors is just beginning, and the best times are still ahead.”