Global mergers and acquisitions surged this year, exceeding $4 trillion for the first time since 2021. This boom was fueled by a record 68 “megadeals” – transactions worth $10 billion or more – and resulted in investment banking fees reaching their second-highest level ever.
A Surge in Dealmaking
Worldwide mergers and acquisitions activity increased by nearly 50 percent from 2024, reaching $4.5 trillion, according to data from the London Stock Exchange Group. This figure is second only to the dealmaking frenzy seen in 2021. Tony Kim, co-president of Centerview Partners, noted, “I haven’t seen large-scale M&A like this in a decade… These are deals which are really transforming industries.”
The increase in activity drove investment banking fees to an estimated $135 billion, a 9 percent increase year-over-year. The United States accounted for more than half of these fees, with $2.3 trillion in deals targeting American companies – the highest proportion since 1998.
Factors Driving the Boom
Several factors contributed to this surge in dealmaking. Mark McMaster, global head of M&A at Lazard, stated, “The current risk appetite is strong, with supportive financing and antitrust environments,” creating an “all systems are go” dynamic. The trend also benefited from a perceived willingness of regulators to engage in “constructive dialogue,” according to Andrew Nussbaum, co-chair of the executive committee at Wachtell, Lipton, Rosen & Katz.
The two largest deals of the year involve a competition between Netflix and Paramount for Warner Bros Discovery, and a railroad merger between Union Pacific and Norfolk Southern, which would create a $250 billion transcontinental company. This level of activity echoes 2021, when WarnerMedia merged with Discovery and Canadian Pacific Railway acquired Kansas City Southern.
While the Trump administration’s efforts to loosen regulation encouraged deal exploration, initial momentum was briefly disrupted by the announcement of “liberation day” tariffs in April. However, dealmaking quickly rebounded, resulting in back-to-back quarters exceeding $1 trillion in M&A activity for the first time in four years.
A Divergence in Deal Sizes
Despite the surge in megadeals, the overall number of transactions decreased by 7 percent this year, reaching its lowest level since 2016. Private equity dealmaking also lagged behind the broader recovery, increasing by just over 25 percent to $889 billion. However, large take-private transactions, such as the $55 billion deal for Electronic Arts led by Saudi Arabia’s Public Investment Fund, Silver Lake, and Jared Kushner, did occur.
An uptick in initial public offerings, including those for Medline and Verisure, provided an alternative path for private equity firms to exit investments. Andre Kelleners, co-head of European investment banking at Goldman Sachs, believes “there’s room for more activity” and that the “sponsor wave” is “only just gaining momentum.”
Frequently Asked Questions
What were the two largest deals of the year?
The two biggest deals of the year are the competition between Netflix and Paramount for Warner Bros Discovery, and the railroad merger between Union Pacific and Norfolk Southern to create a $250bn transcontinental juggernaut.
Did regulation play a role in the increase in dealmaking?
Top dealmakers indicated that the Trump administration’s push to loosen regulation encouraged companies to explore tie-ups that they might otherwise have been hesitant to pursue, seeing a willingness of regulators to engage in constructive dialogue.
Was all dealmaking activity equal this year?
No, the surge in activity was largely driven by megadeals – transactions worth at least $10 billion. The overall number of deals actually fell by 7 percent, reaching the lowest level since 2016.
As the market evolves, it remains to be seen whether these conditions will persist, potentially leading to further consolidation and industry transformation.
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