London: A new report by Bain & Company indicates that the global mergers and acquisitions market will rebound in 2025, fuelled by easing interest rates and advancements in generative AI, enhancing deal-making processes amidst ongoing economic challenges.
In a new report from Bain & Company, the global mergers and acquisitions (M&A) market is poised for a significant resurgence in 2025 after a prolonged period of subdued activity. Following a three-year slump, Bain anticipates that easing interest rates and regulatory challenges will facilitate a more conducive environment for dealmaking.
Les Baird, a partner at Bain and head of the firm’s global M&A and Divestitures practice, stated, “M&A activity tends to be cyclical, and we believe the market is poised for an upturn.” Baird highlighted that while the past year saw a modest recovery, deal values remain historically low relative to global GDP. He pointed out that many companies have been strategising on how to generate inorganic growth amidst challenging market conditions and are now ready to capitalise on improving circumstances.
Bain’s report underscores that intrinsic demand for M&A is still high. Companies are strategising for growth amid economic uncertainty, supply chain disruptions, and geopolitical unrest, with financial sponsors looking to deploy capital effectively. The report also notes an increase in companies aiming to divest underperforming assets in anticipation of future market improvements.
A key driver of this anticipated deal activity is the increasing role of technology disruption, specifically generative AI. According to Bain’s recent survey of over 300 M&A practitioners, interest in generative AI is rapidly growing, with 21% currently utilising this technology, up from 16% from the previous year. By the end of 2025, one in three practitioners expects to engage with generative AI in their dealmaking processes.
Generative AI is expected to enhance each phase of M&A by improving analytical capabilities and enabling practitioners to extract insights from vast amounts of unstructured supplier data. This shift could significantly transform how practitioners identify and validate potential deals. Suzanne Kumar, executive vice president of Bain’s global M&A and Divestitures practice, noted, “Generative AI will have a profound impact on the way deals get done. Early adopters are gaining an advantage by getting to better insights faster.”
Bain anticipates that the technology will streamline many M&A processes, including sourcing, screening, diligence, integration, and divestiture planning. The consultancy predicts that by leveraging generative AI tools, practitioners will be able to draft crucial documentation like integration workplans and transition service agreements (TSAs) in significantly less time than previously required.
The report also examines M&A trends across various sectors, including consumer products, energy, financial services, media, and retail. For instance, the consumer products sector saw a decline in deal values, with many executives planning to divest low-growth or noncore assets over the next three years. In contrast, the energy sector experienced record consolidation in 2024, with companies rapidly realising synergies from their deals.
Overall, the generative AI trend coupled with easing market conditions could signal a revitalisation of M&A activity, with firms keen to utilise advancements in technology to optimise supplier relationships and enhance their strategic positions in the market.
Source: Noah Wire Services
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