M&A markets may finally be back on an upward trajectory in 2025

29/01/25

PwC’s latest ‘Global M&A Industry Trends’-report indicates an upward trajectory, but the potential for surprises, both good and bad, remains high

The global M&A markets may finally be back on an upward trajectory. However, dealmakers will need to keep their eye on some wild cards.

“In the Danish M&A market, we are now seeing signs of recovery as both the number of deals and value increased in 2024 compared to 2023. There are indications of an upward trajectory in 2025, but uncertainty remains especially within geopolitics, the slowing economic growth in Europe and the PE funds’ divestments of overdue portfolio companies.”

Jan Hetland Møller, Co-Head of Deals in PwC Denmark.

2024 in retrospect

Globally, deal volumes decreased by 17% from 2023 to 2024. However, deal values increased 5% in the same period, and we have seen an upward trend in megadeals – especially within the technology space (18 deals greater than USD 5bn in value vs. 6 in 2023).

Regional trends were similar to global but varied at a country level. However, in Denmark, deal volumes increased compared to 2023. The Danish M&A market is, thus, above the pre-pandemic level but below 2021 and 2022.

Three factors underlying the dealmaking optimism

Three main factors underline the newfound optimism that we are entering a new phase of dealmaking in 2024.

The recent improvement in financial markets, spurred by decelerating inflation and expected reductions in interest rates, provides the right conditions for a healthier M&A market.

The lower levels of M&A activity in the second half of 2023 have created pent-up buyer demand and a buildup in seller assets. With numerous PE funds either nearing or past their typical deadlines for their portfolio investments, we expect this will lead to an increase in exit activity.

“During 2023, we saw several deals fall apart due to an unstable market. This leaves plenty of unused “dry powder” in the market that needs to be utilized - especially among PE funds,” says Jan Hetland Møller, Head of Deals in PwC Denmark.

The pressing strategic need for many companies to adapt and transform business models around global megatrends, such as digitalisation and decarbonisation, has also been building. In PwC’s 27th Annual Global CEO Survey, 60 % of CEOs indicate that they plan to make at least one acquisition in the next three years.

As companies look to scale, gain access to technology and talent, and accelerate growth, acquisitions are one obvious path forward. Alternatively - or additionally - divestitures of non-core or underperforming assets will allow them to focus financial and managerial resources on core strategic growth areas. According to PwC’s Value Creation Transformation Survey, 70 % of business leaders expect to use M&A to accelerate adoption of technology and technology-related processes.

2023 in retrospect

Deal volumes in the EMEA region declined by 13 % in 2023 compared to the prior year but remained above pre-pandemic 2019 levels. Deal values declined by 36 % over the same period, primarily due to a decline in the number of megadeals. Macroeconomic factors, geopolitical tensions, and a drop in investor confidence affected both volumes and values and almost all countries experienced a decline in deal volumes in 2023 compared to 2022.

However, the lower M&A performance in 2023 will likely end up driving an M&A upturn.

“During 2023, we have seen a hesitancy towards selling due to lower valuations - this has resulted in pent-up buyer demand. Because of that, being well-prepared and having the ability to move quickly will be key when quality assets do come to market.”

Jan Hetland Møller, Head of Deals in PwC Denmark.

Global M&A Industry Trends: 2024 outlook

Contact us

Jan Hetland Møller

Partner, statsaut. revisor, København, PwC Denmark

4075 6991

Følg PwC

© 2021 - 2026 PwC. Alle rettigheder forbeholdes. PwC refererer til PwC netværket og/eller et eller flere af dets medlemsfirmaer, hvor hver enkelt virksomhed er en særskilt juridisk enhed. Se www.pwc.com/structure for yderligere detaljer.