Today, Deloitte released the findings of its "2025 M&A Trends Survey: A time to pivot,"asking corporate and private equity (PE) leaders in the U.S. about their expectations for M&A activity in the upcoming 12 months as well as their experiences with recent transactions.

Executive sentiment toward M&A activity for the year ahead remained upbeat as of the time of the survey. Nearly three-quarters of corporate and PE executives surveyed anticipate their average deal size or value to increase over the next 12 months, and 79% of corporate and 87% of PE leaders expect the volume of deals to grow larger in the coming year as well.

Breaking it down by industry, financial services and PE led in their M&A outlook for the year ahead, with 87% of each industry's respondents expecting the number of deals their organizations will do this year to increase somewhat or significantly. Financial services also led for optimism around expected size of deals in 2025, with 82% of respondents expecting this to rise as well.

"The M&A market in 2024 saw a measured rebound with dealmakers showing cautious optimism. As we step into 2025, we're seeing a similar trend in activity as compared to January of last year," said  Adam Reilly, national managing partner, mergers, acquisitions and restructuring services, Deloitte & Touche LLP. "Factors like potential for fed rate cuts, proposals for more business-friendly tax policy, and potential deregulatory actions can be strong tailwinds for M&A activity, boosting dealmaker confidence to take action. Despite signs of recovery, risks still exist, and dealmakers should stay agile and disciplined to navigate this evolving environment."

This perspective aligns to findings from Deloitte's most recent "CFO Signals™ 4Q 2024" survey with more than half (55%) of CFOs surveyed indicating their organizations are significantly or somewhat more interested in undertaking acquisitions or mergers in the coming year.

In its 11^th year, Deloitte's "2025 M&A Trends Survey" captured insights from 1,500 U.S.-based executives representing both sides of the dealmaking process, with a 40/60 split between PE and corporate.

Key findings

• Agility and flexibility become essential approaches for successful dealmaking as demonstrated by:

  • Leaders shifting deal targeting strategies; avoid pursuing multiple directions. Eighty-eight percent of corporate respondents and 81% of PE respondents in this year's survey indicated they had made significant shifts in their deal targeting strategies in the past two years. Most notably, the leading shift — for both corporations and PE firms — involved narrowing focus on a smaller number of sectors.

  • Leaders maintaining focus on internal transformation/restructuring while looking ahead to increased deal activity.Eighty-four percent of corporations and 91% of PE portfolio companies reported they have restructured in the most recent 12 months or are in the throes of doing so now.

  • Leaders across both corporate (54%) and PE (52%) continue to look to lending from non-traditional lenders to get deals done, given economic, regulatory and other operational headwinds.

• Corporations and PE firms have made real progress with solidifying their efforts around digital transformation. Nearly all respondents (97%) said their respective corporate and PE organizations have begun incorporating Generative AI or advanced data analytics into their dealmaking processes. In comparison to last year, areas like target Identification (70% vs. 80%); target screening (68% vs. 79%); and integration (65% vs 80%) have risen significantly in terms of digitizing deal processes.

• Organizations look across borders to make deals. Eighty-five percent of respondents expect their interest in acquiring foreign targets to increase or significantly increase in the next 12 months; with market expansion (47%) and access to technology (47%) cited as top two driving factors.