M&A Momentum and Trump Deals: Dealmakers’ Predictions for 2025

M&A activity rebounded in 2024 as access to cheaper financing unleashed pent-up demand for deals after two years of sluggishness.

Many market participants believe Donald Trump’s impending return to the White House will help fan the flames of economic recovery. But Trump’s economic policies could have the opposite effect by reigniting inflation.

We spoke to senior bankers to find out their predictions for M&A across a variety of industries and geographies over the next 12 months. Here are some of their responses:

Tom Miles, co-head of global M&A at Morgan Stanley

“Interestingly, 2024 was one of the best years for privatizations on record – global privatization activity exceeded $250 billion. This shows that private equity firms are still deploying capital, and public shareholders are more likely than private equity owners to Willing to sell. We think this will continue and the number of private equity firms acquiring other private companies should increase. Capital markets are strong and open, and private equity funds are expanding. I wouldn’t bet on a $20 billion privatization. ”

Eamon Brabazon, Co-Head of Global Mergers and Acquisitions, Bank of America

“The stock market is at an all-time high, which has injected enthusiasm for M&A. U.S. companies also have strong confidence that the market will be more inclusive and transaction-friendly in the coming years, and antitrust resistance will be reduced. This provides further support for M&A catalyst.”

Alison Harding-Jones, global head of M&A at Deutsche Bank

“More and more European companies are looking to make acquisitions in the United States so that they can have a manufacturing base there and sell locally. Finding growth is not easy and many CEOs are under intense pressure to deliver it… UK “Relatively speaking, the outlook for the UK is positive for any deal that touches Europe.”

Mark McMaster, global head of mergers and acquisitions, Lazard Inc.

“While we see financial sponsor acquirers gaining momentum as the interest rate environment improves going forward, strategic players are likely to remain the dominant force in M&A activity. Strategic acquirers accounted for 70% of all M&A activity over the past two years; compared to In 2021-2022, the proportion was only 60%. Among the 25 largest transactions announced in each of the past two years, strategic acquirers accounted for 80%. and 90%. A notable trend in the high interest rate environment is the strategic use of equity as M&A currency, allowing them to build portfolios and realize synergies without expanding their balance sheets. However, as borrowing costs increase, decline, this situation may continue, and the market may also see large corporate cash transactions.”

Stephen Pick, Head of Mergers and Acquisitions for Europe, the Middle East and Africa at Barclays

“2025 will be the year of exits for many private equity firms as the backlog of exit candidates increases further in 2024. If you look at the ratio of sponsor buy-side to sell-side activity, it’s increasingly tilted towards the buy-side “Many private equity firms are trying to soft-test the market in 2024 to see if there is interest in their portfolio assets, but many sales processes have not yet started properly.”

Anne Hiebler, Global Head of Mergers and Acquisitions at Credit Agricole

“There are still some headwinds ahead, such as slower growth in certain sectors, deal complexity, increased duration between signing and closing, and geopolitical instability and uncertainty in some countries, but overall we are moving towards Heading in the right direction. The bottom has been reached and the turning point has passed. In 2025, the main deal drivers are expected to be actual company performance and Ebitda growth. Now that M&A financing is available again, the implementation of strategic choices and exit decisions by private equity companies will basically be determined. Driven by the underlying performance of the asset.”

William Mansfield, Head of M&A for Europe, the Middle East and Africa at Deutsche Bank

“M&A deal volume should increase next year, but there are still many challenges ahead. Interest rates will not fall to zero, earnings quality remains an issue and geopolitics remains a complication. On the positive side, European companies have strong Balance sheet and private equity [firms] There is plenty of dry powder available for M&A. ”

Ehren Stenzler, Co-Founder and Managing Partner, LionTree LLC

“In 2025, both strategic and private equity activity will increase, which will drive a lot of deal volume. I don’t necessarily predict that 2025 will be a record year, but I do think it is a step towards that goal. A combination of financial sponsorship activity, overarching strategic activity and a handful of large deals could lead to very large volumes in 2025 and 2026.”

Andrei Milekhin, global head of digital infrastructure investment banking at Nomura Holdings Inc.

About digital infrastructure:

“We will continue to see high levels of activity in the medium to longer term, driven by strong secular underlying trends such as increased data consumption and the rise of artificial intelligence. Data center assets will continue to be highly sought after, as these industries continue to consolidate , we also expect some large fiber network and tower deals.”

Athena Theodorou, Managing Director, EMEA Technology Investment Banking, UBS

About technology trading:

“M&A activity in the European software industry will be more active in 2025. Going private deals will continue to flourish as sponsors are eager to find deals, and a more benign financing environment will also help. I expect there will be more next year ”

Dan Bailey, Co-Head of Global Technology, Digital and Financial Services, HSBC Holdings plc

About the European Telecommunications Industry:

“HSBC is overall bullish on the European telecoms sector as capex on fiber rollout and 5G is slowing, driving rapid free cash flow growth. On the M&A front, we are waiting to see whether regulators’ rhetoric in support of constructive industry consolidation will be matched by their actions [and if] There will be any operator willing to test this as part of a wider pan-European deal. ”

Pamela Codo-Lotti, Global Chief Operating Officer, Activism and Shareholder Advisory, Goldman Sachs Group Inc.

On activists becoming more like PE:

“The PE model is one that a lot of activists have tried to copy, but not many have succeeded. Many activist hedge funds have shorter investment horizons than typical private equity investment horizons, so getting into long-term private equity investments will be a challenge for their limited partners. One problem. From a private equity perspective, reputation matters, and not many private equity players want to be seen as working with activists who are actively pursuing their goals.”

Cong Hui, Head of Capital Markets Department of CICC

“Hong Kong IPO activity will continue to grow in 2025. As of now, approximately 90 projects have passed A1 review and are awaiting issuance. It is worth noting that with the success of Midea’s landmark A-share to H-share IPO, many high-quality A-share companies are considering listing in Hong Kong.”

Peter Bowden, global head of industrial, energy and infrastructure investment banking at Jefferies Financial Group

“While there is no guarantee that major conglomerates will continue to be active in large-scale M&A, the possibility is clearly there. That said, we believe deals in 2025 are more likely to come from smaller majors and larger independents… With the new administration easing antitrust scrutiny, we may see midstream portfolios having an impact on markets where hubs like Mont Belvieu have historically not been possible.”

James Wang, Co-Head of ECM, Asia ex-Japan, Goldman Sachs

“By 2025, the two powerful Asian ECM engines, India and China, will start working. India continued to break records last year, and there is no reason to believe that will not happen again next year. China’s economy will be significantly weaker in 2024 compared to 2023 It’s picking up and we’re seeing it continue to move forward.”

Nicolas Constant, Partner at Centerview Partners LLC in Paris

“France lacks the visibility to support large corporate deals. But the ongoing political crisis is unlikely to affect foreign deal flows. There is a need for French companies to seek growth in the United States, and the push for overseas acquisitions is likely to continue. Financing markets remain strong, and for many French For companies, organic growth is not enough to achieve their strategic goals.”

Srinivas Balasubramanian, National Head, Corporate Finance, KPMG India

“While the IPO pipeline continues to remain active, emerging weak economic indicators such as high core CPI, tight banking sector liquidity affecting credit offtake, and ultimately slowing urban household consumption will have a direct impact on flows into our public markets .An underperforming Indian rupee against a strong US dollar will also dilute the capital gains achieved by foreign investors. Considering this macro scenario, it is reasonable to assume that consumer goods, technology services, media, healthcare, select industrials and financial services. The theme of opportunistic acquisitions in areas such as China will see increased activity.”

With assistance from Manuel Baigorri, Pamela Barbaglia, Dong Cao, David Carnevali, Vinicy Chan, Michelle F. Davis, Julia Fioretti, Baiju Kalesh, Crystal Tse, and Stefani Reynolds.

This article was generated from automated news agency feeds without modifications to the text.