Despite a tumultuous first half of the year, as Trump’s tariffs shook global markets, a wave of mega-deals in H2 meant 2025 ultimately proved to be one of the best-ever years for M&A.
Total global M&A deal values rose 41% to hit $4.81trn, according to Mergermarket, and while global deal volumes dipped below 40,000, a record 70 $10bn-plus deals helped make the year the second-strongest on record for value, behind only 2021.
Unsurprisingly, the market volatility that unfolded after Trump’s ‘Liberation Day’ tariffs in April did not set the stage for high levels of business confidence during H1.
However, as markets stabilised, M&A activity returned, providing corporate partners with a much more positive second half of the year. But with the new year starting with more geopolitical turmoil, are partners remaining positive? Or are they nervous about what’s in store for 2026?
Hot markets
As things stand, the new normal of unpredictability does not appear to be denting optimism among M&A partners for the new year.
White & Case UK public M&A head Patrick Sarch describes the current landscape as a ‘hot market.’
He says: ‘We’ve seen more competitive situations in 2024 and 2025 than in any year since 2016, pointing to a sustained period of heightened competition between bidders.’
‘We’re also seeing a major surge in strategic stake-building, something that hasn’t featured meaningfully for 10 to 15 years,’ he adds. ‘This combination of competing bidders and stake-building is a clear signal of a hot market and the importance of tactical agility.’
Slaughter and May corporate and M&A co-head Simon Nicholls (pictured) also has faith in the strength of markets going into the new year, saying: ‘There’s a lot of assets looking for a home, and you need to find homes for them.’
Gavin Davies, the global head of Herbert Smith Freehills Kramer’s M&A practice, adds that in the absence of heavily contested auctions, ‘the balance of power has continued its shift back towards buyers’.
‘Buyers are taking the time to test target businesses and derisk as thoroughly as possible through due diligence and price negotiation, and there is often more latitude for buyers to reposition deal terms substantially.’
On the recent surge in mega-deals, Davies believes activity has been driven in part by corporate leaders deciding the time was right to execute transformative deals long under evaluation, or that could no longer be delayed.
Slaughters’ Nicholls concurs, saying: ‘People’s psychological inclination to do deals has really been the key driver.’
Nicholls also notes how markets are now more resilient in the face of market upheaval. ‘The interesting thing in the past few years is how quickly people adapt to geopolitical blowups,’ he says. ‘Even with tariffs, you could have held off doing M&A for a lot longer than people did. There’s no way to price that risk and there’s no way to assess that risk, so people have adjusted to that and gotten used to the uncertainty.’
One standout statistic from the year’s M&A data is that while activity levels saw double-digit increases across many major EMEA markets (including 103% in the Middle East and 81% in Iberia) in the UK, deal volumes fell by 8%.
And for confidence to continue and make an impact on domestic markets, UK partners believe increasing macroeconomic stability remains of huge importance.
Ashurst corporate partner James Fletcher says: ‘If interest rates stabilise, both corporates and sponsors will deploy faster, especially where earnings resilience and cash conversion are clear.’
Taylor Wessing M&A and equity capital markets lawyer Andrew Edge adds: ‘Things are still coming through the door all the time, so we are positive for the new year – the variables are the geopolitical issues and the public equity markets.’
He continues: ‘There’s a much greater focus on passive investment in the public equity markets and while everything’s going up, that’s great. But if things start turning down, you can get into a downward spiral, and that’s one of the structural issues that the economy will face. If that happens, that could be pretty painful.’
High tech
One area partners all agree is not in any danger of slowing down is the technology sector, and the data underlines this, with global tech M&A values up 66% to $1.08trn, making it the top-performing sector by some distance.
Linklaters corporate partner Lisa Chang (pictured), UK tech sector co-head, underlines this. ‘Over the last year, we’ve seen activity pick up and tech continues to be one of the hottest sectors for global M&A.’
Edge also notes that venture capital investment is driving this space. ‘There are much larger fundraisings that are done in the UK with venture capital investors rather than on the public markets. That’s one big change in the market – VC investors have been putting a lot of money into technology companies.’
While enthusiasm about emerging technologies such as AI is driving much market optimism, the question of how tech will be regulated provides a note of caution,
As Chang says: ‘The appetite to do deals is there, but often the challenge will be getting the right valuation and navigating the increasingly complex regulatory environment.’
HSFK’s Davies agrees. ‘The global direction of travel remains more regulators, more areas of regulation, and the risk of compliance missteps as well as negative rulings. For M&A lawyers, the strategic planning for complex multi-filing, multi-jurisdictional processes can be busy workstreams in any significant deal.’
Freshfields corporate and M&A partner Kate Cooper strikes a positive note, observing that regulators are starting to become more business-friendly. She says: ‘We are seeing clearances coming through in a quicker timeframe than they were. We’re seeing the regulator, specifically the Competition and Markets Authority, being more front-footed about what they need and responsive to the parties, which is generally positive.’
‘Hopefully, we are going to continue to see that trend of a somewhat more pragmatic approach, with economically grounded assessments of anti-competitive effects, as opposed to focusing on quite novel theories of harm.’
Another sector experiencing similar growth and fierce regulation is defence, which Sarch identifies as another hot market. ‘In 2026, there is likely to be significantly higher government spending on defence, which could support growing M&A activity in this sector and related areas, driving increased cross-border investment flows, particularly from continental Europe.’
Nicholls also notes the rise in defence deals, but says: ‘I’d be surprised if you see mega-deals in the space, because it’s about maintaining national capability. You will see national champions, and then you’ll see cross-border collaboration – but it will be collaboration through joint contracts; maybe a joint venture or a joint build.’
Regardless of how the market shapes up, it’s clear that partners are excited for the year ahead.
Cooper (pictured) concludes: ‘We’ve seen the mega-deals come back, and I think there will continue to be those big, transformative deals where the parties are big enough to be more insulated from short-term macroeconomic headwinds.’
‘When you’re looking to transact, you look at two things. You look at the price and you look at the execution certainty, and those two issues are uppermost in a board’s mind when they’re considering the viability of a deal. I think we are closer than we have generally been over the last couple of years to having better certainty around getting deals done.’
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Deals
Allen & Overy and Shearman & Sterling, 2024
McDermott Will & Emery and Schulte Roth & Zabel, 2025
Ashurst and Perkins Coie, 2025
Clifford Chance, Rogers & Wells and Punder Volhard Weber & Axster, 2000
Norton Rose and Fulbright & Jaworski, 2013
Hogan & Hartson and Lovells, 2010
DLA, Piper Rudnick and Gray Cary Ware & Freidenrich, 2005
Dentons and Dacheng, 2015
CMS, Nabarro and Olswang, 2016
Herbert Smith and Freehills, 2012
King & Wood Mallesons and SJ Berwin, 2013
Honorable mentions
AG managing partner Andrew Johnston (pictured) put the firm’s success down to ‘the combination of a strong focus on domestic markets and clients, coupled with international growth.’
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