Global mergers and acquisitions (M&A) are projected to reach an impressive $4.8 trillion in 2025, marking the second-highest total deal value in history. This represents a significant increase of 36% compared to 2024, according to a report released by Bain & Company. The surge in M&A activity is largely attributed to a wave of megadeals valued at $5 billion or more, as companies traditionally classified as infrequent acquirers return to the market with bold investments.
Despite a modest increase of only 5% in the total number of deals, the overall value has skyrocketed, with megadeals contributing an astounding 75% to the growth of strategic deal value. Notably, around 60% of these high-value transactions were executed by infrequent acquirers, with approximately 40% classified as transformative, meaning their value exceeded 50% of the acquirer’s market capitalization. This trend indicates a calculated risk on the part of companies, necessitating a strong focus on strategic alignment and organizational integration to maximize value.
Technology and Advanced Manufacturing Drive Growth
The technology sector has emerged as a key player in this M&A resurgence, particularly through deals involving artificial intelligence (AI). Deal values in the tech sector increased by over 76%, reaching $478 billion year-to-date, with nearly half of this value stemming from transactions involving AI-native companies or those highlighting AI benefits. Advanced manufacturing also played a significant role, witnessing a 38% growth in deal value, totaling $717 billion.
Geographically, the rebound in M&A activity is evident worldwide. The United States accounted for nearly 50% of the total strategic deal value, while Greater China led in deal count, primarily due to a robust domestic market that constituted over 80% of the region’s M&A value. Japan’s market doubled in value this year, emerging as the third-largest globally, and both Europe and the Middle East reported substantial growth, although the overall deal count in these regions fell by 7%.
Market Conditions Favoring Strategic Moves
Bain’s analysis outlines several factors contributing to this M&A boom. Regulatory pressures and capital costs have eased, and the valuation gap between buyers and sellers has narrowed, with current valuations averaging 11.6x EV/EBITDA. Many executives recognize that delaying strategic decisions is less favorable in a competitive landscape increasingly influenced by AI.
The central role of strategy in driving M&A activity was confirmed by a survey of over 300 M&A executives, with more than 85% reporting that they refreshed their deal pipelines in response to technological shifts. Notably, uncertainties related to tariffs and trade disruptions had a limited impact on deal-making, as less than half of executives indicated that trade restrictions would affect their plans.
While the deal landscape has strengthened in 2025, capital allocations for M&A have reached a ten-year low, accounting for just 7% of cash expenditures among approximately 700 companies in the S&P World Index. This decline is attributed to competing investment priorities, including technology infrastructure, supply chain resilience, and automation.
As AI continues to evolve, its influence on M&A is becoming more pronounced. According to Bain, 75% of strategic acquirers have evaluated the impact of AI on potential targets, with at least 20% deciding against a deal as a result. The use of AI by M&A practitioners has also seen marked growth, with its applications expanding beyond deal sourcing and screening.
Looking ahead, Bain & Company plans to release its comprehensive 2026 Global M&A Report in January, offering insights into expected trends and developments in the coming year, as well as detailed analyses of key industries and the perspectives of M&A professionals from around the globe.
