Deal activity had been expected to surge in 2025, driven by declining interest rates and inflation, renewed investor confidence, and recovering company valuations. In the US, Trump’s pro-investment policies, including deregulation and tax cuts, were anticipated to unlock capital for corporates and fuel more M&A activity in 2025.
But the new President’s protectionist measures and his desire to disrupt relations with its traditional allies have tempered investor confidence and market stability, leading to a sluggish start to the year. Recent figures reveal a 30% decline in the number of US M&A deals in January compared with the same period in 2024.
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Against this background, technology is emerging as a critical enabler, helping M&A professionals navigate risk, enhance efficiency, and accelerate deal execution.
2025 M&A landscape in focus
Since 2021, factors including high inflation, unfavourable interest rates, and regional conflicts have caused difficulties in financing new deals, contributing to a slowdown in M&A activity.
However, 2024 saw the return of green shoots as positive economic changes and more realistic pricing expectations helped restore dealmaking momentum.
Global M&A activity grew from around 39,000 deals to over 45,000 last year, accounting for more than $3.7trn in deal value. In particular, IT, energy and financial services experienced strong activity, with IT accounting for $740.7bn in deal value across 7,455 deals globally.
Within the technology industry, digitalisation and the AI goldrush are driving a lot of deal activity. The same is true of new innovations in health tech, where AI-driven drug development, precision medicine and digital health are driving renewed interest and a need for strategic partnerships. And in the energy sector, there is hope for further robust activity, supported by regulatory incentives and the continued global transition towards renewables.
We should see the continued growth of these sectors in 2025, but businesses will be looking for more certainty and predictability following the turmoil we’re seeing from the new Trump administration.
Persistent hurdles to M&A
While there’s hope that the impact of Trump-driven market shocks will be short-lived, longer-term challenges that could continue to hinder dealmaking remain. Ongoing conflicts, notably in the Middle East and Ukraine, carry with them the potential to spill over, undermining the political and financial stability of developed economies.
Increasing regulatory scrutiny has also extended the time, costs and compliance obligations within M&A, substantially delaying the speed of activity. In 2022 and 2023, at least $361bn in accounted deals were challenged by regulators globally, resulting in the pre-close period being extended from three months to two years[3].
Hurdles linked to regulation extend to the due diligence process. In Western Europe, the timeframe for due diligence and deal proceedings grew to an average of 259 days, a 25% increase compared to 2020. The number of hours spent on deals also increased by almost 50% year-on-year, the highest level since 2020.
The data is clear – dealmakers are spending more time on due diligence before closing deals, adding another layer of complexity and costs in an already lengthy and labour-intensive process.
The role of technology in driving deals
M&A professionals must be prepared to adapt to navigate this changing global landscape. Technology is being seen by dealmakers as an essential tool to increase the efficiency and speed of due diligence, as well as regulatory and cybersecurity compliance. AI, in particular, is poised to transform M&A by streamlining existing due diligence processes and bringing significant cost and time efficiencies.
AI is already transforming the legal sector, the engine room of due diligence processes. AI-driven solutions enhance the efficiency and accuracy of contract review, negotiation, and management, saving organisations both time and money. This has led to a surge of investment in AI-powered legaltech providers[5]. As demand for technology-driven solutions grows, Virtual Data Room (VDR) providers integrating AI capabilities are also emerging as key enablers of more efficient and effective dealmaking.
Primarily used for M&A, VDR platforms enable organisations to streamline document management, improve collaboration and accelerate transactions. As VDRs further integrate machine learning and AI, users can gain access to deeper, actionable insights into deals they are working on, helping them to make informed decisions.
At Ideals, we have integrated AI powered capabilities into our platform such as AI redaction, version tracking, translation, advanced search and document search, all helping to streamline existing processes and improve strategic understanding and global collaboration.
There is a risk, however. As M&A activity increasingly relies on technology, advisors must have a clear understanding of the costs associated with essential tools. The changing geopolitical landscape, the unstable M&A environment and Trump’s unpredictable policies could push up the costs of deals. Careful planning and cost management are therefore more critical than ever.
Transparent pricing models in VDRs can provide dealmakers with the foresight needed to budget effectively, however many legacy providers rely on opaque fee structures to drive revenue. By choosing the right platform with clear and predictable pricing, dealmakers can maintain control over costs while benefiting from a secure, streamlined, and efficient dealmaking process.
The future of M&A
Despite ongoing headwinds, 2025 has the potential to be the year of M&A resurgence, underpinned by declining interest rates, renewed investor confidence, and capital availability. However, navigating protectionist policies and regulatory scrutiny will require adaptability.
Technology will play an increasingly central role in shaping the future of dealmaking. By embracing AI, automation, and secure VDR platforms, dealmakers can accelerate due diligence, improve regulatory compliance, and enhance overall deal efficiency.
As the M&A landscape evolves, those who integrate technology into their dealmaking strategies will be best positioned to capitalise on opportunities and overcome uncertainty with confidence.
Sabine Schilg is the VP of Customer Success at Ideals
