BDO Horizons is a publication focusing on global M&A trends in the SME sector, with the aim of providing expert insights and forecasts on the M&A market and its evolution. The quarterly publication provides an overview of the M&A landscape in different geographic regions. In this issue of BDO Horizons, we focus on real estate, TMT, financial services and natural resources.
Global decline in M&A activity - private equity investors keep the market going
The impact of US tariffs on global trade has led to a drop in M&A activity as investors postpone their decisions in an uncertain M&A market. The number of global mid-market transactions fell by more than 25% in the first quarter of 2025 and remained more than 20% below the same period in 2024, a significant drop below 2021 M&A levels. The value of completed transactions also fell by 25% compared to the previous quarter and by 6% compared to the first quarter of 2024.
Compared to M&A transactions, the number of private equity-driven transactions decreased much less. Without the activity of private equity investors, the start of the year would have been significantly weaker, as they accounted for 35% of all deals.
Globally, M&A activity fell in all regions except the Middle East, where the level remained unchanged. The largest declines were seen in China, Asia, Europe and South America.
Activity also fell in all industries. The largest drops were seen in leisure, business services, energy, mining and utilities. In contrast, the consumer, pharmaceuticals and TMT sectors saw smaller declines.
Due to the uncertainty caused by tariffs, M&A activity is expected to continue to decline in the second quarter, hopefully levelling off in the second half of the year. Both strategic players and private equity investors are ready to invest, and digitalisation and carbon neutrality are expected to remain key drivers of M&A activity.