WTW: Global M&A activity rises for second year, but Q4 slump nods to volatility ahead

Global mergers and acquisitions (M&A) activity continued its recovery in 2025, with 726 deals completed over the past 12 months, marking the second consecutive year of rising volumes, according to new analysis from WTW.

Data published in WTW’s Quarterly Deal Performance Monitor show a 2% increase in completed transactions valued above $100m, signalling a return to pre-pandemic levels of activity.

Deal performance also improved markedly, WTW emphasised.

Based on share price outcomes, M&A transactions in 2025 only marginally underperformed companies pursuing organic growth, by 0.5 percentage points.

That compares with a 10.9 percentage point underperformance in 2024, highlighting a significant shift in how markets rewarded acquisition strategies.

WTW said the improvement reflected stronger equity markets and more disciplined dealmaking.

Around 32% of acquirers outperformed the wider market in 2025, despite competing against global indices that reached record highs during the year.

Large transactions played an increasingly dominant role.

The total value of completed deals rose to $933bn in 2025, an 11% increase on the prior year.

Deals valued above $1bn increased by 14% to 201 transactions, while the average size of large global deals reached a new high of $2.9bn in the second half of the year.

However, the report also highlights a sharp deterioration in performance towards the end of 2025.

After a strong third quarter, in which acquirers outperformed by 11 percentage points, deal performance swung sharply negative in the final three months.

Fourth-quarter M&A transactions underperformed the MSCI World Index by a record 13.9 percentage points, pointing to growing market caution.

Regional outcomes varied.

European acquirers outperformed their regional index by 4.7 percentage points, a sharp improvement on 2024, with 153 deals completed during the year.

North American acquirers continued to underperform, albeit by a narrower margin than in the previous year, while Asia-Pacific buyers also lagged their regional benchmark despite a strong rebound in deal volumes.

WTW said the late-year reversal underscores the importance of strategic clarity as market conditions remain fragile.

Jana Mercereau, Head of Europe M&A Consulting, WTW, said: “Big-ticket deals are driving the market, but they also bring high risk and make it difficult to preserve and amplify value.

Major investments grounded in sound strategy have the potential to reshape a business and establish a path for sustained growth. On the other hand, deals that lack a well-defined, strategic objective can become a recipe for value destruction.”

The report concluded that while momentum carried into the end of 2025, heightened geopolitical risk, volatility and investor scrutiny mean dealmakers face an increasingly uneven environment.

“Deal activity and overall optimism grew in 2025, fuelled by robust equity markets, relative economic stability, rate reductions and a push to adopt AI,” Mercereau said.

“In the coming year, targeted scale will remain key as the market continues to reward larger companies with the capacity to weather sharp and unpredictable swings in M&A activity that have become the “new normal” for dealmakers, buffeted by persistent geopolitical turbulence,” she added.