After a slow start to the year, global mergers, and acquisitions (M&A) activity picked up steam in the third quarter of 2025, indicating an upbeat turn. PwC reports that through May, the total deal value reached $567 billion across 4,535 deals, which was a nearly flat year-over-year performance but laid the groundwork for the Q3 rebound.
With a backlog of about $1 trillion in uninvested capital accumulated due to uncertain pricing and high interest rates, private equity (PE) firms continue to be significant players. Expectations of increased transaction activity in the upcoming months are being driven by that latent capital.
Michael Arougheti, CEO of Ares Management, credited increased clarity regarding U.S. tax laws and tariffs for the Q3 increase in dealmaking. The slowdown in April was followed by a boom in May and June, with notable deals being posted by industries like railroads, cybersecurity, and industrials. As long as the economy stays steady, Arougheti expects activity to continue to pick up speed.
In the first half of 2025, the number of deals fell by 9% compared to 2024, but the total value increased by 15% due to larger megadeals, particularly those worth over $1 billion, which became more frequent by roughly 17% to 19% over the previous year, according to PwC’s mid-year reporting.
Analysts from McKinsey, Bain, Deloitte, and Goldman Sachs highlight a positive combination of macroeconomic tailwinds for the future, including a loosening of monetary policy, less regulatory red tape, and the broad use of AI technologies that present strategic growth prospects. A wider M&A uptick through the rest of 2025 and into 2026 is supported by all these factors.
However, dealmakers continue to exercise caution, particularly in cross-border and mid-sized carve-out transactions that face high financing costs and complex regulations. According to EY, there may only be a one percent increase in U.S. deal volumes in 2025, and uncertainty will continue to exist across all industries.
Additionally, startups are joining the market: Crunchbase reports that in the first half of 2025, startup acquisitions increased by 15 percent year over year, indicating a growing interest in venture-backed innovation assets.
All things considered, the Q3 recovery shows fresh hope as big deals are being approved, capital markets are levelling off, and regulatory environments are becoming more transparent. The upward momentum in value indicates that 2025 may still turn out to be a pivotal year for international dealmaking, even though volumes have not yet fully recovered to their peak levels.
