Globally, the deal-making scene is picking up pace after reports showed that merger & acquistion values having reached $3.1 trillion in 2024, which is a 16% increase from the previous year, but still lower than the pre-pandemic times.
Now, it has been two consecutive years where the deal activity has fallen. Now, it's going up because of low interest rates and a post-pandemic situation. Companies are looking forward to simplifying their business through selling assets or through spin-offs.
Private equity firms, on the other hand, are back to acquisition in an attempt to get US and European bargains.
However, many in the M&A world are closely watching the next second presidential term of Donald Trump. According to the bankers shared by Bloomberg, his policies can hasten recovery by bringing down corporate taxes and deregulation. The corporations will be flexible, and have more access to cash, thus having a greater chance to go into the large deals. Some people believe that 2025 may experience a year of high-value transactions with many companies more liberal to undertake transformational mergers.
Even with this positive trend, however, it may pose a new threat by potentially having Trump come back into office. This may specifically risk new inflation through the planned tariffs on products, possibly driving up interest rates. Some may view this as uncertain to keep them from signing new deals, especially for firms located outside of the US.
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Deal Making Activities in 2024
Despite all these, deal-making activities are quite strong in industries such as advertising, banking, and building materials. Among the largest deals in 2024 are some that have already been concluded.
For example, Mars' $36 billion acquisition of Kellanova as well as several others valued at over $30 billion have been done, per Reuters. Bankers stated that even larger deals could be expected if the policies proposed by Trump were implemented, particularly in the US.
Looking forward, 2025 is going to be focused more on large deals and firms are looking to strengthen and reposition their portfolios. However, though recovery is in place, bankers are cautious and believe that getting deals done is not yet an easy task. They are hopeful but not optimistic that it will be a repeat of the boom times of 2021.
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