The worst is over! The global M&A market is expected to usher in a strong recovery

The Zhitong Finance App learned that although the performance of the M&A market in the first half of this year did not meet the expectations of investment bankers, a series of large-scale mergers and acquisitions in Asia and a resurgence in optimism in the US market may be paving the way for future large-scale M&A transactions.

Data shows that from January 1 to June 27, the total amount of global M&A transactions reached US$2.14 trillion, an increase of 26% over the previous year. Among them, the increase mainly comes from the Asian region, where the total number of mergers and acquisitions more than doubled to 583.9 billion US dollars. Trading activity in North America also rose to $1.04 trillion during this period, up 17% from the same period last year.

Trump's tariff policy, which began with the so-called “Liberation Day” in early April, cooled the market atmosphere, causing many mergers and acquisitions and initial public offerings (IPOs) to be postponed until the next quarter. Tommy Rueger, UBS's co-head of global equity capital markets, said: “We had anticipated a large number of trading activities in the first half of 2025, but the reality is that we haven't seen it.”

However, interviews with more than a dozen top bankers showed that their confidence that the worst in the market is over is growing. The S&P 500 and Nasdaq indices reached new highs, boosting market optimism that M&A activity will be more active in the second half of the year. Ivan Farman, co-head of Bank of America's global mergers and acquisitions business, said: “There are many deals that have been put on hold that will be restarted. I'm optimistic about the second half of the year.”

Deal makers said that factors such as the trade war initiated by US President Trump, high interest rates, and market uncertainty brought about by broader geopolitical tension hampered the performance of the global M&A market this year, but they did not completely disrupt the “explosion year” that bankers had originally anticipated.

Deal makers say there is reason to be optimistic, as market recovery and Trump's more relaxed antitrust policies pave the way for larger deals. John Collins, global co-head of the M&A business at Morgan Stanley, said, “Compared to a year ago, the possibility of a large-scale transaction of more than 50 billion US dollars has increased.”

At the same time, market volatility has been reduced to a level which indicates that investors are more at ease. Philip Ross, Vice Chairman of Jefferies Bank, said: “It is clear that market momentum continues to build up, paving the way for large-scale transactions. People are feeling more positive than they were a month ago, and they are starting to implement previous decisions.”

As the market stabilized, institutional investors began to return to the stock market, and more companies also launched IPOs that had previously been postponed due to uncertainty. Tommy Rueger said, “The combination of these factors over the past three to four weeks has created an extremely strong emerging market background, and we have seen a significant rebound in merger and acquisition activity.” Saadi Soudavar, head of European, Middle Eastern and African equity capital markets at Deutsche Bank, added: “Despite tariffs and geopolitical fluctuations, the stock market has shown remarkable resilience.”

morale booster

At the height of tariff turmoil, a number of major deals helped boost market morale, including Global Payments's acquisition of a credit card processing and account services company for $24.25 billion in April. British Chartered Communications (CHTR.US) announced that it will acquire its private competitor Cox Communications for $21.9 billion. Additionally, US equipment manufacturer Chart Industries (GTLS.US) and Fox (FLS.US) agreed to a merger, and the combined company was valued at approximately $19 billion.

According to Dealogic's data, 17,528 deals were signed in the first half of this year, compared to 20,583 in the same period last year. However, this year's deal was larger, which boosted the total transaction amount. The data shows that compared with the same period last year, the number of transactions over $10 billion increased by 62%.

Asia's deal matching is a highlight. Overall merger and acquisition activity increased to US$583.9 billion in the first six months of this year, up from US$269.9 billion in the same period last year. Some of the biggest deals in Asia are concentrated within the Asia-Pacific region, including Toyota Motor's announcement on June 3 that it will privatize one of its suppliers for $33 billion, and a consortium led by Abu Dhabi National Petroleum Corporation (ADNOC), which proposed a $18.7 billion all-cash acquisition plan for Santos, Australia's second-largest oil producer, on June 16.

Despite market fluctuations, the Asian market is still driving the growth of global equity financing. Total equity issuance in the region rose nearly 8% year over year to reach 350 billion US dollars. Raghav Maliah, Vice Chairman of Goldman Sachs Global Investment Bank, said: “You will see more mergers and acquisitions within Asia. Japan has played a key role in Asian trading volume, and we believe this trend will continue.”