Global mergers and acquisitions (M&A) are displaying a fascinating dichotomy, with deal values rising sharply, even as the number of transactions continues to fall. This trend signals a “flight to quality,” as companies and private equity firms concentrate on securing large, strategic, and high-quality assets rather than pursuing a high volume of smaller deals.
Recent data from leading financial analysts paints a clear picture. While overall global deal volumes have seen a modest decline in the first half of 2025, the total value of these transactions has increased. The number of deals valued at over $1 billion, and particularly those exceeding $5 billion, has grown significantly. This is a stark contrast to the previous period, which was marked by a broader, yet less valuable, deal landscape.
Key Drivers and Notable Deals
Several factors are fuelling this shift. A key driver is a more nuanced and patient approach by dealmakers. Rather than chasing every opportunity, acquirers are focusing on long-term strategic goals, such as portfolio realignment and securing a dominant position in high-growth sectors.
In the technology sector, the race for AI leadership is a primary catalyst. Large technology firms are using M&A to acquire cutting-edge AI capabilities and talent. One of the most significant deals of the year was Palo Alto Networks’ $25 billion acquisition of CyberArk, a cybersecurity firm with strong AI integration, aimed at strengthening its market position and product offerings.
Consolidation is another major theme, particularly in industries with high fixed costs like energy, telecommunications, and finance. The Union Pacific-Norfolk Southern merger, valued at $85 billion, is a prime example of a “scale deal” designed to create operational efficiencies and expand market share. Similarly, the Charter Communications-Cox Communications merger in the US, valued at $34.5 billion, is seen as a defensive move in the face of a challenging market.
The Role of Private Equity and Market Conditions
Private equity firms, sitting on substantial amounts of unspent capital, are playing a critical role in this trend. They’re increasingly focused on “take-private” transactions and acquiring large, high-performing assets that can withstand economic uncertainty. The Blackstone Infrastructure acquisition of TXNM Energy for $11.5 billion highlights this appetite for large-scale infrastructure assets.
Economic conditions, including persistent interest rate uncertainty and geopolitical tensions, have made dealmakers more cautious. This prudence has led to more rigorous due diligence and a preference for targets with a proven track record and strong growth prospects. While this has slowed down the overall pace of dealmaking, it has led to more robust and higher-value transactions when they do occur.
Regional Variations and Outlook
The M&A landscape isn’t uniform across the globe. The Americas, particularly the United States, continues to be the most active region for large deals, largely due to a more optimistic economic outlook and a regulatory environment that has become more predictable. Europe and Asia-Pacific have also seen an increase in deal values, albeit with their own regional nuances and a greater emphasis on cross-border transactions to mitigate geopolitical risks.
Looking ahead, experts believe this trend will likely continue into the latter half of 2025 and beyond. As companies seek to navigate a complex global environment, M&A is becoming a powerful tool for strategic transformation and competitive advantage. The focus is shifting from simply “doing a deal” to making a “transformative deal” that fundamentally reshapes a business for the future.