M&A in 2025: ‘The Light Turned Green’

It would take some doing for the mergers-and-acquisitions market of 2026 to match its 2025 performance. Actually, it would take a lot.

After starting 2025 in the doldrums, M&A activity went on a scorching run, both in the US and globally, in the second half of the year. Driven by megadeals and strategic buyers, global M&A totaled $4.8 trillion, the second-biggest annual figure on record and a stunning 41% increase over 2024. There were 70 deals worth $10 billion or more, nearly two dozen of them in the fourth quarter alone. Entertainment, technology, telecommunications, and energy firms ranked among the buyers in the year’s 10 biggest acquisitions. “Once the light turned green”—meaning lower interest rates, increased likelihood of regulatory approval, and other factors—“acquisitions took off,” says Torrey Foster, managing partner for the Consumer Markets practice in North America for Korn Ferry.  

A friendlier regulatory environment, combined with lower interest rates and firms struggling to find revenue growth from just about any source, explains some of the jump. But while the world focused on how AI was disrupting business, the flurry of mergers forced massive shifts, both at the top of house leadership and among workers, that rarely made headlines. Much of that turmoil will trickle into the New Year as firms complete merger processes. Meanwhile, experts say to expect a new partner, one with an ability to jolt business, to join the merger mania: private equity. “There’s a lot of private capital that has been sidelined because of the high cost of debt,” says Justin Ripley, a senior client partner in the Global Industrial practice at Korn Ferry.

Indeed, half of private-equity investors in a recent survey cited exiting portfolio companies as their top priority over the next six months—and mergers are the path to take. Stephanie Davis, a senior client partner for the Private Equity and Technology practices at Korn Ferry, says firms are gearing up to meet investors’ expectations. “There have been a lot of requests for short-term CEOs who can come in for 18 to 24 months to help get a portfolio company ready for sale,” she says. Davis also expects a lot of PE activity in 2026, in part due to firms’ need to distribute returns to investors in earlier funds in order to raise additional capital from them for new ones.  

To be sure, with purchase prices in the tens of billions of dollars, raising capital and limiting the amount of debt needed for an acquisition is getting harder and harder. That’s where foreign investors and sovereign-wealth funds come into play. Last year, foreign investors were involved in 99 deals valued at $145 billion—both record highs by a wide margin. In 2024, for instance, sovereign funds participated in 62 deals valued at $43 billion.  

Foreign funds investing in US companies is nothing new, and in most cases, their participation is limited to a minority stake. Foreign funds also must give up governance rights like board seats to avoid regulatory issues. What’s different now is that these funds are branching out from entertainment, sports, and other “glamorous” industries and into steel, energy, and real estate. Or, as Foster puts it, “They are a big part of the equation that has been more active in driving the overall market.” 

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