Examining the 2025 M&A Spike: Legal Drivers and Future Outlook

By: Yoon Choi
Edited by: Brooke Sharp and Sophie Leonard

Economic Backdrop

In 2025, the rampant growth of artificial intelligence, fluctuations in consumer spending, and trade policy reforms had astounding impacts on various industries, resulting in a wave of directional reforms for corporations. Amid such uncertainty, many firm executives turned to mergers and acquisitions (M&A) to better strategize for economic growth. Deals reported in the past year amounted to 40% in market value across strategic, private equity, and venture capital sectors. This rise is demonstrative of the gradual recovery of M&A activity since record lows in 2022, caused by the economic turmoil of the COVID-19 pandemic. Valuation data illustrates this rebound, ticking up in the last year but still remaining notably lower than record-breaking highs in 2021. 

The M&A surge was also a global phenomenon; outside the U.S., the APAC (Asia-Pacific) and EMEA (Europe, the Middle East, and Africa) regions both experienced growth in deal value. In particular, China and Japan led APAC growth, respectively becoming the second and third largest M&A markets in the world. [1]

Largest Transactions

It is worth noting that despite the global hike in M&A deals, the largest singular transactions were still primarily concentrated in the U.S. These large-scale agreements—valued over $10 billion—surged 120%from 2024, accounting for approximately 30% of all M&A value. M&A activity concentrated in four of the historically largest sectors: technology, industrials, financials, and healthcare. [2] Some of the largest deals of 2025 included the Union Pacific and  Norfolk Southern Merger ($88.26 billion); Electronic Arts (EA) leveraged buyout to PIF, Silver Lake, and Affinity Partners ($55 billion); and Kimberly Clark’s acquisition of Kenvue ($40 billion). [3] The most notable of these is the Union Pacific deal, which if approved would create the first continental railroad in the U.S. However, it still awaits approval from the Surface Transportation Board, already facing pushback on the grounds of their first application containing incomplete information. The board has publicly stated that it must adhere strictly to regulations, as the deal is expected to close by 2027. [4]

Besides these megadeals, corporations like Charter Communications, Alphabet, Constellation Energy, and Palo Alto Networks also made significant acquisitions. A key trend in M&A deals from 2025 was the high prevalence of privatization, with many moves being made by private equity and venture capital firms. There was a 60% increase in year-over-year deals for take-private activity in North America; this is especially highlighted by the EA megadeal and Sycamore Partners’ $23.7 billion acquisition of Walgreens. Blackstone also carried out two privatization projects, acquiring Hologic and TXNM Energy for $18.3 billion and $11.5 billion, respectively. [2] 

How AI is Shaping M&A

According to analysts, trends in M&A deals for 2025 were influenced most by AI. Among 100 of the largest corporate transactions from 2025, approximately one-third cited AI as part of the strategic motive in their press releases. AI was most mentioned in the technology, manufacturing, and power and utility sectors. [5] For many of these corporations, M&A was a key driver in acquiring the necessary capabilities required to deploy AI into their own products. Access to cybersecurity technology, data analytics, and infrastructure allows companies to implement valuable assets that better position themselves in the AI race. Acquisitions become especially lucrative in this race, because as technology continues to exponentially accelerate, executives will prefer to buy capabilities rather than internally developing them. By purchasing such assets, companies can simultaneously stay involved in the technological race and prevent themselves from disruption by other AI-powered firms. [6]

Insights for 2026

With the resurgence in megadeals, growth of take-private acquisitions, and the rampant expansion of artificial intelligence, experts have concluded a variety of potential outcomes for the M&A landscape in 2026. In general, the spike in deal value implies a positive sentiment heading towards 2026. There is a notable deal of momentum in the technology and financial industries, with both sectors riding the AI wave. As technology continues to advance, more companies are likely to become enticing targets for acquisition by conglomerates, rapidly speeding up valuations even for early-stage companies. The high volume of megadeals in 2025 also places pressure on smaller companies to look towards consolidation. As dominant industry forces continue to venture towards purchasing AI capabilities and other large-scale deals, pressures are placed on mid-small sized players to pursue consolidation rather than independent strategic maneuvers.  

Entering 2026, there are a variety of implications that government regulations can play for M&A transactions. For megadeals like the recent Warner Bros acquisition, antitrust enforcement continues to be stringent with market concentration concerns. With bipartisan support in Washington and the new enforcement of state-level filing, mergers and acquisitions in industries like tech and media may slow down. On the other hand, deregulation efforts have also been pursued by the Trump administration, which theoretically projects boosts in M&A deal count. This is highly impactful for regional banking, who now have shorter approval times and opportunities to add assets to compete against larger conglomerates. Finally, the U.S. government’s own approach towards domestic and international investment will likely have a ripple effect. The Trump administration has been adamant about investment for national security, taking stakes in companies like Intel and MP Materials. How the government decides to enforce inbound US investments will also shape the M&A landscape, with countries like Japan and Saudi Arabia playing crucial roles in U.S. transactions in 2025 [7]. 

Notes: 

1. Bain & Company. (2026). Looking back M&A report 2026 (Report). https://www.bain.com/insights/looking-back-m-and-a-report-2026/#

2. Lazard. (2026). 2025 M&A review and 2026 outlook (Report). https://www.lazard.com/media/vnajb4v3/2025-ma-review-and-2026-outlook-report.pdf

3. Yu, R. (2025, December 26). M&A boomed this year: Here were top 5 mega-deals of 2025. Yahoo! Finance. https://finance.yahoo.com/news/m-boomed-were-top-5-194817836.html

4. Surface Transportation Board, “STB Finds UP-NS Merger Application is Incomplete,” Press Release No. 26-02, January 16, 2026, https://www.stb.gov/news-communications/latest-news/pr-26-02/

5. PwC. (2026). Global M&A industry trends: 2026 outlook. https://www.pwc.com/gx/en/services/deals/trends.html

6. Goldman Sachs. (2025). 2026 M&A outlook: Thinking big, building bigger (Report). https://www.goldmansachs.com/what-we-do/investment-banking/insights/articles/2026-ma-outlook/goldman-sachs-2026-global-ma-outlook.pdf

7. Hunton Andrews Kurth LLP. (2026, January 28). Hunton M&A outlook for 2026. https://www.hunton.com/insights/legal/hunton-m-a-outlook-for-2026

Bibliography:

Bain & Company. (2026). Looking back M&A report 2026. https://www.bain.com/insights/looking-back-m-and-a-report-2026/#

Chkarboul, C. (2026, February 9). M&A outlook appears bright. Los Angeles Business Journal. https://labusinessjournal.com/featured/ma-outlook-appears-bright/

Goldman Sachs. (2025). 2026 M&A outlook: Thinking big, building bigger. https://www.goldmansachs.com/what-we-do/investment-banking/insights/articles/2026-ma-outlook/goldman-sachs-2026-global-ma-outlook.pdf

Hunton Andrews Kurth LLP. (2026, January 28). Hunton M&A outlook for 2026. https://www.hunton.com/insights/legal/hunton-m-a-outlook-for-2026

J.P. Morgan Private Bank. (2025, September 8). Get ready: Bank deregulation now has Washington’s support. https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/ideas-and-insights/get-ready-bank-deregulation-now-has-washingtons-support

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Lazard. (2026). 2025 M&A review and 2026 outlook report.https://www.lazard.com/media/vnajb4v3/2025-ma-review-and-2026-outlook-report.pdf

McKinsey & Company. (2026). Global private markets report 2026. https://www.mckinsey.com/industries/private-capital/our-insights/global-private-markets-report

PwC. (2025, December 16). Private equity: US deals outlook. https://www.pwc.com/us/en/industries/financial-services/library/private-equity-deals-outlook.html

PwC. (2026). Global M&A industry trends: 2026 outlook. https://www.pwc.com/gx/en/services/deals/trends.html

Surface Transportation Board. (2026, January 16). STB finds UP-NS merger application is incomplete (Press Release No. 26-02). https://www.stb.gov/news-communications/latest-news/pr-26-02/

Yu, R. (2025, December 26). M&A boomed this year: Here were top 5 mega-deals of 2025. Yahoo! Finance. https://finance.yahoo.com/news/m-boomed-were-top-5-194817836.html