Global M&A Industry Trends 2025

“In the Danish M&A market, we are now seeing signs of recovery as the number of deals increased in 2024 compared to 2023. There are indications of an upward trajectory in 2025, but uncertainty to the recent momentum remains especially within geopolitics, the long-term interest rates, the slowing economic growth in Europe and the PE funds’ divestments of overdue portfolio companies.”

Jan Hetland Møller, Co-Head of Deals in PwC Denmark.

2024 in retrospect

Globally, deal volumes decreased by 17% from 2023 to 2024. However, deal values increased 5% in the same period, and we have seen an upward trend in megadeals – especially within the technology space (18 deals greater than USD 5bn in value vs. 6 in 2023).

Regional trends were similar to global but varied at a country level. However, in Denmark, deal volumes increased compared to 2023. The Danish M&A market is, thus, above the pre-pandemic level but below 2021 and 2022.

The number of Danish M&A transactions with financial advisors

^{Source: Mergermarket and PwC analysis}

In a global perspective, the deal value increased across most sectors, with entertainment and media, technology, and aerospace and defence, as well as the financial services sectors all having some notable megadeals. On the other hand, every sector saw a decrease in deal volumes between 2023 and 2024.

From a Danish point of view, most sectors has shown an increase in the deal volume in 2024 with TMT and Industrials contributing most to the total deal volume.

Three factors underlying the dealmaking optimism

According to PwC’s 28th Annual CEO Survey, only 38% of CEOs were ‘extremely’ or ‘very’ confident about their company’s prospects for revenue growth over the next 12 months. That figure increased to 53% when respondents were asked about their company’s prospects over a three-year horizon. The Danish CEOs were more optimistic with 51% and 60%, respectively, being ‘extremely’ or ‘very’ confident. This is a significant increase compared to the survey published in 2024 (37% and 49%, respectively). This suggests CEOs expect that current actions or future planned actions will lead to further growth of their company’s top line.

M&A continues to be an essential strategic element in helping companies shape their future, transform their business models and generate growth in an economic environment with slowing organic growth. 81% of the CEOs who made a significant acquisition in the past three years plan to make one or more acquisitions in the next three years.

Another trend we expect to see more of in 2025 is the refining of corporate portfolios as companies look to fill capability gaps and divest non-core or low-growth assets. In sectors including the industrials, consumer health and entertainment, among others, large corporates have been separating themselves from non-core business, either through spin-offs or sales.

Another factor that could significantly affect M&A is how the AI wave plays out at a company and market level as a catalyst for change and reinvention. For now, market expectations for AI and its potentially transformational capabilities are sky high, with about half of CEOs in our latest survey expecting GenAI to increase their company’s profitability in the year ahead.

AI is not only attracting investment in AI companies but also has supercharged investment in the digital infrastructure required to support it, including data centres and power generation capabilities.

This AI-led capital expenditure ‘super cycle’ will likely affect M&A in two ways: First, there could be a crowding out of M&A as investor allocations shift from a strategy of ‘buy’ (via M&A) to one of ‘build’ (via capital expenditures, partnerships and strategic alliances); second, we expect to see more opportunities to capture market share and value by making strategic acquisitions of companies or assets that are positioned within the AI value chain.

Over the past three years, below-average levels of PE exits have resulted in rising average holding periods for PE portfolio companies. We anticipate more PE-backed companies coming to the market in 2025 as exit pressure is mounting for private equity funds.

Our analysis on overdue exits among Denmark-headquartered private equity portfolio companies with EBITDA greater than DKK 20m shows 53 overdue exits with additional 8 being overdue in 2025. The majority of Danish overdue exits are within Information Technology, Industrial, and Consumer & Retail verticals. In a global perspective, the inventory of private equity portfolio companies as of December 2024 amounted to 29,400, up 4% from a year earlier.

Another factor related to PE’s underlying the optimism is the build-up of ‘dry powder’. According to Preqin estimates, available funds for private capital firms globally (excluding venture capital) exceeded USD 1.6tn in 2024 for the first time, with approximately USD 1tn of that in the US alone.

“The pressure arising from both buying and selling assets in combination with a more optimistic outlook might fuel the PE dealmaking in 2025. However, uncertainty relates to PE exits in Denmark in 2025 as we haven’t seen a significant decrease in the number of overdue investments during 2024.”

Jan Hetland Møller, Co-Head of Deals in PwC Denmark.

Potential for surprises

Regardless of the dealmaking optimism, dealmakers can’t ignore the wild cards, which include:

Dealmakers and markets are still digesting the outcomes of the elections that took place in many countries during 2024 and the resulting changes to policy direction. The impact of the US election, in particular, is reverberating around the world, and the new administration’s policies may have significant impact in US and around the world – you can read more about the ‘Trump-effect’ in the global study.

Several major global economies, such as Canada, France, Germany, and South Korea are facing political instability, and many have national elections in 2025. The CEO Survey showed that 25% of the Danish CEOs deem their company to be ‘extremely’ or ‘very’ exposed by geopolitical conflicts.

According to our 2025 CEO Survey, 72% of the Danish CEOs expects an improvement in the economic growth in the global economy in the coming year (compared to 31% last year). Globally, 58% of the CEOs expects an improvement. Despite this optimism, the CEO Survey showed that macroeconomic volatility and inflation remain high on the list of challenges, with 22% and 21% of Danish CEOs deem that they are 'extremely' or 'very' impacted by macroeconomic volatility and inflation, respectively. The same is indicated among investors based on PwC’s Global Investor Survey 2024. This is, among other things, driving by volatility in interest rates.

Despite expectations towards an improved growth in the global economy in the coming year, some markets are still expected to exhibit a slowing economic growth, e.g., Europe on an overall basis. Target’s market dynamics and outlook have also proven to be the second most important driver behind ‘broken deals’ according to our analysis of broken deals in Denmark.

In addition to the above, the momentum behind rate cuts has slowed, and with long-term interest rates rising in the US and elsewhere, this could make returns harder to find and lead to more challenging refinancing processes.

In mid-January 2025, the forward price-to-earnings ratio for US stocks (based on the S&P 500) was 22.87, compared with 13.67 for non-US international stocks (based on the S&P International 700). Companies with higher valuations may use their stock as part of an inorganic growth strategy. We may also see more cross-border deals as US companies, enforced by a strong US dollar, seek opportunities overseas, particularly in Europe.

Industry views

PwC’s ‘Global M&A Industry Trends’-report also includes a deep-dive into sector-specific trends, such as:

Health industries dealmakers gear up for a more favourable M&A environment.

Portfolio gaps, supply chains and policy direction are expected to drive M&A activity by health industries companies in 2025
Pharma and life sciences pursue biotech deals to fend off patent cliffs, divest non-core assets as part of portfolio optimisation and use creative structures to fund innovation
Private equity interest in med-tech and digital health is rising—and exits of PE-backed companies are expected to pick up
Recently spun-off or divested pure-play over-the-counter (OTC) and consumer health businesses are expected to seek acceleration of their own transformation plans via M&A

The AI boom and continued technology and business model disruption will keep M&A active

With technology at the heart of the AI boom, this is setting off a capital spending super cycle and creating opportunities for M&A across multiple sectors—data centres, digital infrastructure, energy and more
More tech megadeals and M&A in software, semiconductors and IT services ahead as demand grows for new products and solutions— investors attracted to the sectors' recurring revenues and higher margins
A continued viewership shift away from the traditional linear model to new media is creating M&A opportunities as companies reinvent their business models and divest non-core or underperforming operations
Telecom companies' focus on portfolio optimisation will lead to M&A opportunities as they unlock value by delayering and transitioning to a more ‘puretone’ business model

CEOs looking to expand, consolidate and rebalance their portfolios will boost M&A activity in industrials and services

Energy transition and technology trends such as AI, automation and digital transformation will lead to acquisitions and investments to grow market share
CEO focus on portfolio rebalance will drive divestiture activity, with potential for further spin-offs from large companies in 2025
Geopolitical landscape is leading dealmakers to focus on domestic M&A opportunities and may limit global expansion and international deal activity

Geopolitics, energy security priorities and technological advancements will drive M&A in energy, utilities and resources sectors

Energy transition remains the most significant driver of M&A activity across the energy, utilities, mining and chemicals sectors
As energy demand surges, the race to secure reliable, affordable and sustainable energy sources is intensifying, setting the stage for robust M&A activity
Significant cross-sector interdependencies will create a catalyst for M&A, partnerships and other alliances as companies strategically reposition and transform their business models
A varied geopolitical landscape will drive M&A to secure supply chains of critical minerals and the impact of new US policies may lead to portfolio rebalancing in favour of natural gas and fossil fuels

Dealmaking in consumer markets shows signs of recovery as investor confidence returns and companies refocus strategy

Megadeals, higher M&A multiples and a backlog of consumer PE exits are renewing a sense of optimism for further deals activity in 2025
Acceleration of strategic transformations and portfolio optimisation to drive growth and improve business performance will lead to acquisitions and divestments of assets
Higher consumer savings rates, uncertainty over interest rates and a lingering "vibecession" on the consumer front may hold back growth and lead to more distressed M&A and consolidation
Increased exits will drive private equity dealmaking in 2025, together with acquisition opportunities arising from corporate divestments and take-private transactions