Bankers predict global mergers and acquisitions (M&A) volumes will surpass $4 trillion next year, driven by U.S. President-elect Donald Trump’s promise of less regulation and lower taxes.
The technology sector is expected to account for the largest share of M&A activity globally, with a jump of over 20% year-on-year to $534 billion. However, deal advisers caution that the rate of dealmaking heading into 2025 is starting to return to levels seen in pre-pandemic years.
A booming U.S. economy, pent-up demand, and trillions of dollars of unspent capital sitting on corporate balance sheets should result in more deal activity in the near term, bankers said. Top investment banks are starting to ramp up hiring to ensure deal teams are fully staffed to handle the expected surge in transaction volumes.
The outlook for U.S. corporate earnings is looking brighter, which is expected to improve cross-border M&A activity as cash-flush foreign buyers increasingly eye attractive U.S. targets. Fast-growing economies in Asia are also being viewed as attractive for opportunistic private equity firms.
Deal advisers noted that the rate of dealmaking heading into 2025 is starting to return to levels seen in pre-pandemic years, but some experts remain cautious, predicting that 2025 may be more like 2019 or 2020 before COVID-19.
Source: https://www.reuters.com/markets/deals/dealmakers-eye-4-trillion-plus-ma-haul-2025-trump-boost-2024-12-19