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1、Global M&A Report 2025How leaders are adapting to meet the momentDealEdge is a registered trademark of Bain&Company,Inc.and CEPRES GmbH.HelixSM is a service mark of Bain&Company,Inc.Copyright 2025 Bain&Company,Inc.All rights reserved.AcknowledgmentsThis report was prepared by the leadership team of

2、Bain&Companys Global M&A and Divestitures practice,with special direction from Les Baird,partner;David Harding,advisory partner;Dale Stafford,partner;Kai Grass,partner;Suzanne Kumar,practice executive vice president;Rebecca Telzak,senior manager;and an editorial team led by David Diamond.The authors

3、 wish to thank the many members of the Bain leadership team who contributed articles to this years report.Additionally,we wish to thank the following colleagues for their help with this report:Bain Partners Harshveer Singh,Peter Horsley,and Colleen von Eckartsberg;Practice Senior Analyst Amol Mathur

4、;Consultants Fiona Bowen and Noah Plaue;Senior Associate Consultants Yuan Cai and Tiffany Chen;Associate Consultants Matthew Griff and Gabriel Moscoso;and the editorial team including Steven Anderson,Brooke Dunn,Shahnaz Islam,Jesse Nunes,Daniel Robinson,Martyna Uziallo,and Kirti Yadav.This work addi

5、tionally benefited from the support of Bain Capability Networks Abhishek Jain,Roopam Kalra,Chhavi Khandelwal,Mohit Gupta,Yashovardhan Dey,Vishaal S,and Bain Capability Network Labs Arko Chatterjee and Suprakash Gosh.1Global M&A Report 2025ContentsLetter from the Leader of Bains M&A Practice .2State

6、of the Market.3Looking Back at M&A in 2024:Dealmakers Adapt as the Market Idles .4Looking Ahead to 2025:Preparing for What Comes Next .12Generative AI in M&A:Youre Not BehindYet.18Where the Deals Are:2024s Top M&A Markets.22Industries.28M&A in Aerospace&Defense:How Incumbents Can Respond to Well-Fun

7、ded Disrupters .29M&A in Automotive and Mobility:Hedging Bets until a Clear Future Emerges .31M&A in Building Products and Technology:Deals to Shape the Future .33M&A in Consumer Products:Carving Out to Grow.38M&A in Energy and Natural Resources:Making Deal Economics Work in a Record Year.45M&A in F

8、inancial Services:Coming Back to Life.50M&A in Healthcare and Life Sciences:Why Companies That Adapt to the New Realities Will Come Out Ahead .57M&A in Machinery and Equipment:Learning from the Best .62M&A in Media and Entertainment:Own the Consumer,Own the IP,or Own Nothing .67M&A in Retail:A Rebou

9、ndand No Sign of Letting Up.72M&A in Technology:Revenue and Cost Synergies in Tandem.77Telecom M&A:Here Are the Latest Deal Trends Worldwide.79Methodology.82Key Contacts in Bains Global M&A and Divestitures Practice .842Global M&A Report 2025Letter from the Leader of Bains M&A Practice Dear friends,

10、We publish our annual M&A report to help business leaders get better at M&A.In 2024,deal value was historically low as a percentage of global GDP,but we are optimistic for the year ahead as M&A and divestitures will be critical tools for companies navigating technology disruption,a post-globalizatio

11、n economy,and the inevitable shifting profit pools.A big reason for our optimism is seeing first-hand how companies have pursued M&A despite three years of headwinds,including high interest rates and regulatory scrutiny.Among the big adjustments:New deal economics pushed many buyers to prioritize ra

12、pid value creation,pursuing both revenue and cost synergies in tandem.We also saw a fundamental shift to scale M&A,especially in industries with high fixed costs.Any easing of those headwinds will only fuel further dealmaking momentum.Read on to learn how the best companies are adapting to todays M&

13、A market by industry,trends by market,and how theyre deploying generative AI to improve M&A capabilities.Les Baird Leader of Bains M&A and Divestitures PracticeLooking Back at M&A in 2024:Dealmakers Adapt as the Market Idles .4Looking Ahead to 2025:Preparing for What Comes Next .12Generative AI in M

14、&A:Youre Not BehindYet.18Where the Deals Are:2024s Top M&A Markets.22State of the Market4At a Glance The three-year-long M&A headwinds continued as dealmakers waited for a turn in the market.Corporate deals rose by 12%in value,while financial acquisitions rose by 29%.Strategic valuations remained ne

15、arly flat at 10.4 times,with buyers still skeptical on price and sellers reluctant to move too soon.The best dealmakers changed their processes to accommodate regulatory scrutiny,high interest rates,and other new realities.This chapter was originally published in December 2024.The year 2024 is on tr

16、ack to end as it beganwith much anticipation.For most of the year,there were great expectations that interest rates would fall,that private equity would get back in the game while getting out of portfolio positions,that buyers and sellers would reach a dtente on valuations,and that regulatory concer

17、ns would become merely background noise.All of this would mean a great revival in M&A activity.STATE OF THE MARKETLooking Back at M&A in 2024:Dealmakers Adapt as the Market IdlesIn a year of anticipation,movers got deals done.By David Harding,Dale Stafford,Kai Grass,Suzanne Kumar,and Rebecca Telzak5

18、Global M&A Report 2025Notes:Strategic M&A includes corporate M&A deals(which includes private equity exits)and add-ons;percentage increase reflects the first 11 months of 2024 over the same period in 2023Source:Dealogic as of December 2,2024Notes:Strategic M&A includes corporate M&A deals(which incl

19、udes private equity exits)and add-ons;percentage increase reflects the first 11 months of 2024 over the same period in 2023Source:Dealogic as of December 2,2024M&A deal market volume for deals greater than$30 million,in thousands11.68.86.56.87.77.88.28.18.07.97.26.56.87.16.75.37.59.27.66.5Percentage

20、 change from 2023 to 2024 for all M&A,7%20052010201520202024estimate2024projectionSpecial purpose acquisition companies,48%Venture capital/corporate venture capital,9%Financial investors,12%Strategic M&A,7%Figure 1b:.while global M&A deal volume reversed its two-year decline and is up 7%year-to-date

21、M&A deal market value,in trillions of US dollarsPercentage change from 2023 to 2024 for all M&A,15%20052010201520206.12024estimate3.73.23.52024projection3.74.14.33.73.94.63.62.82.72.82.72.33.24.63.9$2.9TSpecial purpose acquisition companies,47%Venture capital/corporate venture capital,30%Financial i

22、nvestors,29%Strategic M&A,12%Figure 1a:Global M&A deal value was up by 15%year-to-date vs.last year and on track to reach around$3.5 trillion .6Global M&A Report 2025Notes:S&P 500 enterprise value-to-EBITDA valuations represent the annual average multiple;strategic M&A valuations represents median m

23、ultiple for each calendar yearSources:Dealogic as of December 2,2024;S&P Capital IQ as of December 3,2024Enterprise value-to-EBITDA valuations201510520052010201520202024Year over year 20232024S&P 500Strategic M&A+19%1%16.6X10.4X2024Figure 2:Strategic deal valuations remain historically low and well

24、below public market valuations,which spiked in 2024Ultimately,none of the macroeconomic tailwinds that M&A practitioners had hoped for during the first 11 months of 2024 ever really happened as expected.Overall,the level of M&A activity was a middling$3.5 trillion,a number consistent with what we sa

25、w in the mid-2010s.The headwinds largely stayed in place.For example,interest rates did come down just enough to reignite interest by private equity and other financial investors as that class began to regain ground with a 29%increase in deal value year over year.Corporate M&A,which is less influenc

26、ed by small movements in the cost of debt,is on track to end the year 12%above 2023,with steady growth across all regions.Deal volume will rise by 7%(see Figure 1).Strategic deal valuations remain historically low and well below public market valuations,which spiked in 2024(see Figure 2).Rather than

27、 face substantial markdowns at exit,private equity and venture capital investors dug in with their portfolios.Private and public companies with the option to hold did,too.So,with less competition and a lack of urgency,some deals simply languished.Meanwhile,the shadow of regulation continued to loom

28、over deal pipelines as the pre-close period for challenged deals stretched,adding cost and risk to contested deals.Many companies put deals on hold pending the outcome of national elections,hoping for more clarity on the future regulatory environment.If anything,in 2024,the best companies learned to

29、 thoughtfully adapt their M&A strategies and processes to get out ahead of any potential macroeconomic or political situation.Many practitioners told us that they were surprised by the macroeconomic factors but that they ultimately continued moving ahead with their plans.7Global M&A Report 2025For s

30、ome,that meant establishing multiple time-to-close scenarios in order to adapt to the longer close periods caused by extensive regulatory reviews.For some,it meant compensating for new deal economics by laying plans for speedier synergies capture.On November 6,the anticipation moved in another direc

31、tion as US companies awaited a shift in tone by a new federal government administration.Will regulators ease their stance,spurring companies to advance deals that have been put on hold,and thus deliver a booming M&A market in 2025?Or will an expected boost in deficit spending and increased tariffs b

32、y the incoming US administration reignite inflation,resulting in a return to higher interest rates,and thus stifle deal activity?How acquirers adapted in 2024In this evolving marketplace,dealmakers changed their M&A approach in three important ways,adapting their strategies to higher interest rates,

33、revising deal strategies when facing intense regulatory scrutiny,and tweaking their capabilities to keep getting better.Dealmakers adapted their M&A strategies to the new realities of higher interest rates.Strategic acquirers were more selective in their deals,required more concrete value creation,w

34、ere less willing to pay for long-term top-line growth,and,most dramatically,adjusted to the new M&A value equation by pursuing both revenue and cost synergies in tandem.Instead of the traditional approach of primarily capturing cost synergies in scale deals and revenue synergies in scope deals,compa

35、nies needed to deliver both to attract dealmakers.For example,the$35 billion Capital OneDiscover merger aimed to deliver revenue synergies with a new customer segment as well as economies of scale with combined payment systems.Its a shift that is particularly evident in the tech industry.For example

36、,when announcing the proposed$14 billion deal for Juniper and its AI-native networking business,HPE cited attractive immediate and long-term opportunities for both top-line and bottom-line growth.Scale deals accounted for 59%of the largest strategic deals in 2024thats the highest proportion since 20

37、15(see Figure 3).Its also a distinct reversal from the trend toward scope M&A and more evidence that relatively high interest rates pushed acquirers to deals with rock-solid sources of value creation,favoring those with a clear line of sight to bankable synergies within the first year.The popularity

38、 of scale deals was most prominent in industries with higher fixed costssuch as energy and natural resources,retail,financial services,and telecommunicationsand it was not limited to the biggest players(see Figure 4).For example,consolidation in oil and gas extended down to the midstream,with moves

39、such as ONEOKs$2.6 billion acquisition of Medallion Midstream.In telecommunications,Vodafone and Three combined to create a viable third mobile provider in the UK.8Global M&A Report 2025Note:Analysis includes strategic deals with value greater than$1 billion during the first three quarters of 2024,e

40、xcludes real estate and services Source:Bain M&A Scale-Scope databasePercentage of deals greater than$1 billionScaleScope100%806040200Dealcount64102915391392843Advanced manufacturing and servicesMediaTechnologyEnergy and natural resourcesRetailFinancial servicesTelecom-municationsConsumer productsHe

41、althcareand life sciencesSignificant strategic dealsQ1Q3 2024202320222021202020192018201720162015Percentage of scale deals Percentage of scope and capability deals5259414951494850505459485149515250504641Note:Analysis includes strategic deals with value greater than$1 billion,excludes real estate and

42、 services Source:Bain M&A Scale-Scope databaseFigure 4:Scale deals predominated in 2024,especially among industries with higher fixed costsFigure 3:This year,scale deals accounted for 59%of the largest strategic dealsa major shift9Global M&A Report 2025Dealmakers adapted to intense regulatory scruti

43、ny.Sustained regulatory scrutiny impacted dealmaking this year in ways visible and not.In our survey of more than 300 M&A practitioners,nearly half of global executives said that regulatory concerns impacted the type of deals they considered in 2024.In response,they are revising deal strategies and

44、spending more time screening up front,evaluating attractive deals for antitrust concerns early.These moves helped them to predict the likelihood of approval or the need for asset divestitures prior to investing time and money in the deal.Others just avoided deals.And at least a few waited to see the

45、 outcome of elections.In the interim,this dynamic created a barbell effectthat is,companies found it easier to do either small,under-the-radar deals or large deals with huge value creation potential.In fact,some told us that the midsize deals werent worth the extra effort that regulators were requir

46、ing.Smaller deals make up the heart of M&A.In 2024,deals valued at less than$1 billion accounted for 95%of all activityand the number of those deals grew for the first time in four years.However,megadealsnamely,those valued at greater than$5 billionpropped up total deal value,including the$36 billio

47、n Mars-Kellanova deal in consumer products and the$34 billion Synopsys-Ansys combination in technology.Most megadeals receive extensive regulatory review,and as of December,it was not clear which deals will close and when.Meanwhile,its important to note that government regulation regarding M&A doesn

48、t necessarily develop in lockstep across jurisdictions(or changes in an administration).India clarified merger guidelines and aimed to reduce approval timelines in 2024 while the Biden administration introduced more comprehensive merger filing requirements to provide US regulators more visibility in

49、to deal dynamics.Under the Trump administration,these requirements will remain in effect,but antitrust posture will likely be more lenientat least for some sectors and deals.Newly elected EU leaders are contemplating more openness to intraregional consolidation in pursuit of economic resiliency,but

50、they may find resistance from national authorities.In Japan,financial authorities have encouraged more M&A through corporate governance reforms.Dealmakers adapted their M&A capabilities to keep getting better at M&A.Earlier this year,we published our long-term research demonstrating how companies ha

51、ve gotten better at M&A over time and how the most active acquirers consistently outperform their less active counterparts by a wide margin(see the Bain Brief“How Companies Got So Good at M&A”).In fact,over the years 20122022,frequent acquirers achieved 8.5%growth in total shareholder return compare

52、d with 3.7%for companies that stayed out of the market(see Figure 5).In 2024,nearly two-thirds of these frequent acquirers did a deal.The best dealmakers are experimenting with ways to improve their processes for todays market.For some,that meant shifting more work from integration to how they get t

53、he deal donefor example,sharpening the pencil on revenue synergies,not just cost synergies.Theyre putting more emphasis on strategic screening,wrestling with valuations,and navigating negotiations.Some practitioners tell us that as deals have gotten trickier,theyve found it challenging to pivot thei

54、r focus from integration to those upstream activities.10Global M&A Report 2025Another best practice:In 2024,early adopters used generative AI for sourcing,screening,and sharpening their overall diligence.According to our executive survey of more than 300 M&A executives,one in five M&A practitioners

55、has used generative AI for M&A activities this year,and those users report achieving a reduction in the effort,time,and cost of their M&A processes as a result.Active acquirers today are honing their M&A strategies and processes in good times and bad.Those who stay on the sidelines let those capabil

56、ities atrophy and risk falling further behind.Different industries,different fatesThe relative stasis in the overall market masks differences in fortune among industries.Most industries have recovered from a two-year downswing since 2022 and have held steady or grown in 2024.Energy and natural resou

57、rces led the pack again as a wave of consolidation prompted more than 10 megadeals valued at greater than$5 billion during the first 11 months of 2024(see Figure 6).And there were other headline deals,such as the$58 billion offer from Alimentation Couche-Tard for Seven&I in retail or the$20.3 billio

58、n Verizon-Frontier merger in telecommunications,both of which drove gains in their industries as well.Longtime M&A stalwart industries,however,such as technology and healthcare and life sciences,remain well underwater compared with their vibrancy during the era of lower interest rates just a few yea

59、rs ago.Both of those sectors are populated by historically active acquirers focused on scope deals for growth,Source:Bain M&A Value Creation Study 202310-year total shareholder returnsFrequent acquirers(greater than one deal per year)Infrequent(less than one deal per year)Inactive200020103.3%4.5%+57

60、%5.2%5.47.9+96%10.63.75.6+130%8.52010202020122022Figure 5:Frequent acquirers are gaining a performance advantage over time11Global M&A Report 2025and they now face the twin challenges of heightened regulatory scrutiny along with the high interest rates that make paying for growth more expensive.In a

61、ddition to scale moves,companies used M&A to transform themselves or take advantage of fast growth opportunities within their industry.Thats why Disney bought 9%of Epic Games,maker of Fortnite,one of the most successful metaverse games.Its also why LG Electronics bought an 80%stake in smart home har

62、dware company Athom.In 2024,companies across industries also acquired targets to build critical capabilities,especially in AI.Thomson Reuters acquired Safe Sign Technologies,a developer of legal-specific large language models,to enhance its workflow management offerings.Stryker bought care.ai to bol

63、ster its healthcare IT solutions.And in 2024,some acquired to make strides in sustainability.Holcim purchased Mark Desmedt and Cand-Landi Group to accelerate its decarbonization and circular construction.In our full report,we take an industry-by-industry look at how companies are changing their appr

64、oaches to dealmaking,and we report on the key trends that M&A practitioners are likely to experience in 2025.Figure 6:In a year when most industries grew or held steady,typical M&A stalwarts technology and healthcare and life sciences remained well below historical levelsAnnual M&A strategic deal va

65、lue by industry,in billions of US dollars 2024202320152022 average53126557036125528717725232523662137142119401096065TechnologyEnergy and natural resources40%Difference of 2024 from 20152022 average27%54%Healthcare and life sciencesConsumer productsMediaAdvanced manufacturingand servicesFinancial ser

66、vicesRetailTelecommunicationsNotes:Deal values based on the first 11 months for each year;strategic M&A includes corporate M&A deals(which includes private equity exits)and add-ons;real estate deals excluded Source:Dealogic as of December 2,202412STATE OF THE MARKETLooking Ahead to 2025:Preparing fo

67、r What Comes Next As the M&A market regains footing,it will be defined by those that can adapt to a new game.By Dale Stafford,Kai Grass,David Harding,and Suzanne KumarAt a Glance We expect that the two biggest inhibitors to deals in 2024namely,interest rates and regulatory challengeswill ease in 202

68、5.Tech disruption,post-globalization,and shifting profit pools are enduring forces leading companies to consider M&A in various forms.To make the new deal economics work,the most successful companies will take a more aggressive approach to value creation.A companys ability to move down the generativ

69、e AI experience curve in M&A processes may become just as important as deal frequency as a predictor of deal success.After three years of underwhelming M&A activity,2025 may finally be the year that the M&A market breaks through.During that slow time,the best companies persisted,learning how to navi

70、gate unfavorable market realities to deliver inorganic growth.For many,there wasnt an option.Foundational shifts in technology,sector profit pools,and the broader global economy demanded a strategic response.13Global M&A Report 2025Now,any easing of the two fiercest M&A headwindsnamely,the cost of c

71、apital and regulatory scrutinywill only fuel further momentum for dealmakers.As the twin pressures become less acute,more companies will join those that have learned how to adjust.So,we believe that over time,M&A will return to historic levels of activity.In“Looking Back at M&A in 2024:Dealmakers Ad

72、apt as the Market Idles”(published in December),we explored how we got here and the many wrinkles of the 2024 market,including the pendulum swinging back to scale deals,which now represent 59%of all M&A;the fact that tech deal activity,generally a bellwether for all M&A,fell well below historic aver

73、ages;and how the all-important gap between strategic M&A valuations and public market valuations continued to widen.Strategic deal valuations are historically low while public market valuations reached all-time highs in 2024.Over the past three years,global M&A as a percentage of nominal GDP has lin

74、gered at nearly 30-year lows,even when considering the cyclicality of the markets peaks and troughs(see Figure 1).The total M&A market in 2024 ended slightly up year over year(13%in value,9%in volume)for the second-lowest level of value and volume in more than a decade.What happens now?And how can s

75、avvy dealmakers make the best use of M&A to deliver on their strategies?Figure 1:Global M&A value as a percentage of nominal GDP is the lowest since 1995Global M&A deal market value,in trillions of US dollarsGlobal M&A deal value/globalGDP(nominal)19952000200520102015202020248642010%86420Total M&A d

76、eal valueUS recessionTotal M&A as a percentage of global GDPNote:Total M&A deal value includes strategic M&A(which includes corporate buyers,sponsor exits,and private equity add-ons)and nonstrategic M&A(which includes financial investors,venture capital/corporate venture capital,and special purpose

77、acquisition companies)Sources:Dealogic;S&P Capital IQ14Global M&A Report 2025Lets start by talking about why we see an upswing.The most important reason is that intrinsic demand for deals remains high,even if activity is still muted today.M&A is central to business strategy as companies seek pathway

78、s to grow amid tremendous transformative forces and as they struggle to balance risk and reward during a period of uneven economic outlooks,supply chain disruptions,geopolitical tensions,and more.Many have learned that M&A can reshape portfolios more quickly,efficiently,and often at a lower cost tha

79、n homegrown,organic options.And financial sponsors are eager to put money to work,too.Moreover,the pipeline of supply has been building.Everyone,from corporates refocusing their strategies to private equity and venture capital firms pressured to provide liquidity,seems to have at least a few assets

80、that they wish to sell once the market comes back and valuations rise.While the jury is still out on how low interest rates will drop(if at all)in 2025,if one looks across the globe,its possible to see signs of hope in the regulatory department.New administrations in the EU and US are ushering more

81、openness to M&A.Europe has signaled a desire for more pan-European industry champions(although national interests may still prevail).In the US,the Trump administration is likely to use remedies and settlements,in contrast to a litigation-focused approach.The UK Competition and Market Authority recen

82、tly said it would favor behavioral remedies and revise its merger assessment process.India clarified merger guidelines and aimed to reduce approval timelines in 2024.In 2025,strategic dealmakers will look beyond near-term swings in market momentum to find the right deals to be competitive,profitable

83、,and enable sustainable growth.M&As big three:Technology disruption,post-globalization,and shifting profit pools Lets look at the three most important and enduring pressures that will keep companies turning to M&A.Technology disruption.Its the long-term shift that will result in the most strategic t

84、ransformation and M&A in the years ahead.Generative AI/AI,automation,renewable energy,and quantum computing are just a few of the technologies that companies will need to build or buy to maintain competitive offerings and cost positions.Tech and non-tech companies alike will continue to have voracio

85、us appetites for tech deals to retool their businesses.Over the past six years,non-tech companies were the buyers in one in every three strategic tech deals worth more than$100 million.It is why Visa acquired Featurespace,an AI-native transaction monitoring company that will enable cutting-edge frau

86、d and financial crime prevention.And it is why Emerson is acquiring the remaining shares of AspenTech,a portfolio transformation move that will enable Emerson to deliver robust software automation solutions.A telling sign of the times is that 70%of private equity companies have killed a deal when a

87、likely negative impact of generative AI on the targets business model became clear(see the infographic“Creating Value with AI:The Race Is On in Private Equity”).15Global M&A Report 2025Given the rapidly evolving technological and competitive landscape,deals for generative AI assets are overwhelmingl

88、y early stage,minority stake,or a partnership rather than direct acquisition.Looking ahead,capital demands for generative AI could force companies to make portfolio moves that free up cash to invest in large language model partnerships and equity stakes.Post-globalization.The global economic landsca

89、pe is realigning,and M&A will continue to be a big part of the response.National economic interests are being reasserted through reviews of foreign direct investment and M&A activity on national interest groundsand tariff policies,too.To prepare for the second Trump administrations proposed move to

90、stiffen tariffs,executives are reevaluating global footprints to ensure access to attractive end markets and security of supply,which could prompt both acquisition and divestiture activity.In parallel,the world is moving from a bipolar(transatlantic/China)to multipolar(US/EU/China)dynamic.As China c

91、harts a more self-reliant economic path,new issues arise for multinationals evaluating potential in-market deals.In Europe,geopolitical uncertainty remains top of mind for executives.National political challenges in France and Germany increase an appetite for domestic companies to pursue outbound M&

92、A for growth.Conversely,in a weakened local economy,domestic companies could be an attractive value play.Shifting profit pools.Beyond technology and global economic shifts,M&A enables companies to adapt their strategies toward shifting profit pools of all types.For example,media companies are reachi

93、ng across sectors,acquiring to build up evergreen content libraries to compete against technology mega-platforms(see“M&A in Media and Entertainment:Own the Consumer,Own the IP,or Own Nothing”).In consolidated sectors such as consumer products,the largest players reshape and focus on their parenting

94、advantage by shedding assets.Thats the reason a record number of them are re-sorting brand portfolios to find the best owner(see“M&A in Consumer Products:Carving Out to Grow”).In fragmented sectors such as building products,leaders are building local scale even as they enhance their portfolios with

95、new capabilities to achieve faster and more sustainable and cost-effective construction(see“M&A in Building Products and Technology:Deals to Shape the Future”).Gameplan for the year aheadAs weve learned from our decades-long analysis of M&A,the companies that successfully navigate these tricky water

96、s will be those that can best adapt their approaches.What follows are five important ways to do so.Pressure test the link between your strategy and M&A roadmap.In todays market,dealmakers need to create their own luck.Now is the time to revisit and revise M&A strategy and pressure test it against th

97、e realities of the market.Given the overall strategic ambition,clearly articulate the types of assets and deals required to deliver success.Will it be viable to find the appropriate assets at the appropriate price to advance this strategy?M&A roadmaps should provide strategic and financial guardrail

98、s to be practical and executable by management,and to align the board and senior executives.Long-term portfolio strategies often take years to implement and executeand they can shift in unexpected ways as each deal 16Global M&A Report 2025is completed.(For a look at how some of the best industrial c

99、ompanies have pulled off strategic portfolio reinvention,see“M&A in Machinery and Equipment:Learning from the Best.”)As you update your M&A roadmap for the long-term vision,know that your M&A capability will need to evolve,too.That means devising an approach for the long term and rigorously assessin

100、g what you need to get there based on whats worked(and what hasnt worked)in the past.Was your biggest challenge in sourcing?Aligning internal stakeholders?Capturing value post-acquisition?And critically,do you have strong enough M&A capabilities to deliver on a multiyear strategy?Affirm your geograp

101、hic footprint and the implications for your M&A roadmap.As national industrial policy and tariffs shift around the globe,now is the time to proactively evaluate the appropriate response to plausible scenarios.The questions to answer for each possibility:What is the right asset footprint to support g

102、rowth ambitions and strategic priorities in both the near term and long term?What geographies should we be prepared to double down on or exit?Where do we require direct,local control of channel,supply chain,or sales?Where can we utilize alternative transactions such as joint ventures or partnerships

103、 to gain access and mitigate risks?Maintain a relentless focus on concrete value creation.A relatively higher cost of capital will continue to give an advantage to the near-in returns that drove scale dealmaking in 2024.To get to yes on a deal,companies will need a sharper proprietary view on value

104、creation earlier in the deal process.Theyll need confidence in their ability to deliver concrete,rapid cost and revenue synergies alike.Consider how the new deal economics forces tech companies to pursue revenue and cost synergies in tandem(see“M&A in Technology:Revenue and Cost Synergies in Tandem”

105、)and requires energy and natural resources companies to dramatically speed up the pace with which they generate synergies(see“M&A in Energy and Natural Resources:Making Deal Economics Work in a Record Year”).In our experience,assured value capture begins with faster,deeper,and more focused diligence

106、 that considers integration implications(timeline,costs,stakeholders)during diligence,not afterand that aligns the leadership team on the financial ambitions earlier in the planning(see the Bain Brief“The Three Most Important Steps in M&A Due Diligence”).Use generative AI to improve M&A outcomes.Gen

107、erative AI is already transforming M&A work.The benefits are accruing to early adopters and frequent acquirers,and the value gained from AI tools grows with user sophistication.As we explain in“Generative AI in M&A:Youre Not BehindYet,”M&A teams that leverage generative AI tell us that they are fast

108、er to develop insights and decisions and that AI sharpens their views on target assets.Acquirers that can combine proprietary insights with generative AI execution could gain an advantage thats just as important as overall deal frequency as a predictor of success.The learning curve is real;get start

109、ed soon.Mitigate risk and costs through alternative deal types.When an outright acquisition isnt justified,more companies are hedging their bets by taking minority stakes or engaging in joint ventures,partnerships,or licensing arrangements.The moves are most attractive during times of high cost and

110、high uncertainty,such as an emerging technology without a defined standardthat applies to everything from generative AI to electric vehicle batteries.17Global M&A Report 2025The combination of economic weakness,changes in geopolitics and national industrial policies,tech disruptions,and valuation ga

111、ps between buyers and sellers all contribute to the uncertainty and indecision that may make alternative deal types more attractive for leadership teams that cant get aligned on what the future holds.But whether companies pursue alternative deals or traditional M&A,those that have been less active i

112、n recent years face a double challenge.They may need to revive atrophied M&A capabilities while also trying to catch up to the frequent acquirers that(as history has shown us)always outperform.Read on to learn more about the future of M&A across industries and how companies can adapt.18STATE OF THE

113、MARKETGenerative AI in M&A:Youre Not BehindYet How early adopters are getting faster and better at dealmaking.By Jeff Haxer,Maja Omanovic,Ben Siegal,and Brooke HoustonAt a Glance The performance gap between active acquirers and less frequent acquirers will widen as a result of generative AI usage an

114、d capabilities.About one in five surveyed companies currently uses generative AI in M&A processes,and more than half expect to integrate it into their dealmaking by 2027.Early adopters tell us that extending usage of generative AI tools across more M&A processes multiplies the benefits.Late follower

115、s will be outbid for good deals and find themselves staying too long in processes for bad deals.Generative AI is here to stay.The potential is nearly limitless,and its impact on M&A will be profound.We expect that companies that master the use of generative AI in M&A over the next five years will id

116、entify targets faster than their competitors,underwrite more deal value with confidence,execute diligence and integration activities more rapidly with fewer resources,and ultimately deliver higher M&A-assisted total shareholder returns(TSRs)(see Figure 1).19Global M&A Report 2025Figure 1:M&A practit

117、ioners see potential benefits from generative AI tools at various stages of the deal-making processExpected enhancements to M&A strategy and process from use of generative AI,selected top mentions Increased pipeline throughputMore accessible informationAccelerated dealtimelinesFinding the right deal

118、Increase sector screenscompletedIncrease targets considered in long listImprove effectiveness of initial screeningImprove quality of outside-ininformation gatheredDecrease time to understand market trendsDecrease time to develop transition service agreementsDecrease time to develop execution planVal

119、idating the dealDelivering the value52%504949484138Source:Bain M&A Practitioners 2025 Outlook Survey(n=307)The good news is that if youre not yet using generative AI in your M&A process,youre not alone.We surveyed more than 300 M&A practitioners and found that 21%of respondents currently are using g

120、enerative AI for M&A.It was 16%in 2023.Frankly,we expected higher growth.But digging into the numbers to determine which companies exactly are using generative AI and for what purposes,we see how those M&A practitioners investing in the emerging technology have positioned themselves to leap ahead of

121、 the competition.First,consider that 36%of the most active acquirers are using generative AI for M&A.This is important because our decades-long study of M&A performance shows that companies that do one or more deals per year consistently outperform their less active counterparts in TSRs.It means tha

122、t they are honing their processes to get better and better at dealmaking.Companies that do infrequent M&A and that are not actively investing to build generative AI into their M&A processes should expect to see that TSR gap widen.Second,private equity is an avid early adopter of generative AI techno

123、logy across industries,with more than 60%of interviewed private equity firms using at least one tool to improve sourcing,screening,or diligence.That means if private equity is active in your sector,and you are not investing in generative AI,then you can expect even stiffer competition.20Global M&A R

124、eport 2025In addition to relying on generative AIenabled tools to accelerate sourcing,screening,and diligence,early adopters have started to dip their toes into the technology for integration and divestiture planning as well as program management.The most active users have plans to systematically ex

125、pand generative AI tools reach across their entire M&A processes.Within the next 12 months,we expect early adopters will use generative AI tools to draft integration workplans and transition service agreements(TSAs)in less than 20%of the time that they previously spent on such activities,allowing th

126、em to mobilize working teams faster with better initial information.The wave after that will involve using generative AI tools to access specific company data to help size realistic cost and revenue synergies and to craft value creation plans based on the prior performance of their acquisitions.With

127、in the next five years,we expect every single step of the M&A process will be enabled by generative AI.Facing the prospects of losing out on good deals,falling behind in synergies,and failing to unburden employees,more companies are planning to use generative AI,with more than half of all companies

128、expected to deploy the technology for M&A by 2027.As more companies take advantage of such improvements in their M&A capabilities,they set a higher bar for competitors.Late followers in adopting generative AI for M&A are going to face an uphill battle in three areasnamely,making the best-informed bi

129、ds and knowing when to walk away from a deal,identifying new ways to underwrite and quickly realize value,and protecting people and the business during M&A.Making the best-informed bids and knowing when to walk away from a deal.For example,early adopters relying on generative AI for deeper diligence

130、 will spend only about one day summarizing the data,instead of one week,so they will have more time to analyze how to extract maximum value from the deal.Faster summarizing helps companies identify and underwrite more concrete opportunities for good deals while quickly determining the bad deals they

131、 can avoid.Identifying new ways to underwrite and quickly realize value.Companies relying on generative AI will be able to identify more detailed cost and revenue synergy opportunities as well as vastly improve their ability to write the draft plan to achieve them.Consider the possibilities in cross

132、-selling potential.By feeding a tailored generative AI tool information such as sales,pricing,and customer relationship management data,as well as catalog information,a company can quickly identify,prioritize,and suggest 21Global M&A Report 2025actions to achieve specific cross-selling targets.This

133、will allow it to underwrite higher synergies in a transaction if that is needed and capture more value more quickly post-close.Protecting people and the business during M&A.Deals can be hard on employees as line leaders across the business must juggle time on M&A projects with their day jobs,risking

134、 distraction to the business.Nearly 80%of companies using generative AI in their M&A processes said that they benefit from reduced manual efforts.This means employees spend less time on the M&A program and can more easily juggle demands from the base business.Easing the load on employees can improve

135、 performance and retention.Facing the prospects of losing out on good deals,falling behind in synergies,and failing to unburden employees,more companies are planning to use generative AI,with more than half of all companies expected to deploy the technology for M&A by 2027.Heres what they can learn

136、from the early adopters.Start now.New technology requires testing and learning to build expertise,identify high-value use cases,and change user behavior.All that takes time.Companies wont be able to catch up to the earlier adopters by simply buying a generative AIenabled solution in the future;it wi

137、ll slow the learning curve.While becoming fluent in generative AI will take time,companies can begin reducing the time required for manual processes within the first week of adopting the technology.Build an AI portfolio.A basic version of a generative AI tool can be as simple as a well-engineered pr

138、ompt that references high-quality data sources.If nothing else,companies can start with this initial giant step:They can get an enterprise license and start using it.Then,they can buy or build more advanced solutions in which they find value.Innovate with intent.The best companies will quickly look

139、beyond simple automation tasks.Theyll rethink their end-to-end M&A processes with generative AI capabilities in mind.Theyll prioritize the opportunities to transform M&A capabilities,protecting and growing areas of competitive advantage.Evolve the M&A team.Generative AI will increasingly pick up the

140、 time-consuming project management tasks.That raises the question of what skills a company will need to evolve its M&A capability.Great deals are executed by practitioners who focus more on strategic value creation than on the project management tasks.So,using generative AI to outpace competitors in

141、 M&A requires companies to rethink their talent strategy,with a focus on creating sustained value in the future.The promising technology will have a significant impact on the entire M&A process.If you have not invested yet,dont worry;you arent behind.But you will need to begin your journey quickly t

142、oward becoming fluent in the technology.Otherwise,youll find it difficult to complete the deals that truly move the needle.22Where the Deals Are:2024s Top M&A MarketsExplore the strategic M&A data by region and key takeaways from selected markets around the world.STATE OF THE MARKETOutbound value:$1

143、67 billion5%year over yearUS and CanadaStrategic M&AInsights from 10 selected marketsMarket value:$1.2 trillion2%year over yearA shift from megadeals(deals greater than$5 billion,which declined by 9%in value)to small and midsize deals(up 14%)was driven by a wave of smaller deals in healthcare and li

144、fe sciences as well as telecommunications.Regulatory scrutiny led nearly half of dealmakers to change tactics as approximately one-third of challenged US deals were ultimately blocked or withdrawn.North Americas inbound tech activity is up 83%in value,even as global technology deal value stalled.By

145、Colleen von EckartsbergInbound value grew by 8%,while domestic value remained flat.Strategic M&A regional value($B)Strategic M&A regional value growth(%)GrowthValueNorth AmericaSouth America251,228EuropeAfricaAsiaAustralia$1,228B$57B$528B$25B$666B$64B2%27%9%36%20%8%23623Outbound value:$37 billion 0%

146、year over yearGreater ChinaStrategic M&AMarket value:$291 billion 8%year over yearDomestic dealmaking grew by 17%,spurred by government policies and dealmakers growing reliance on M&A for growth amid macroeconomic challenges.Inbound deal value declined by 63%in 2024,reflecting foreign investors grow

147、ing caution about the Chinese market.The“Nine Measures”(introduced by the government in 2024)aim to facilitate cross-border transactions and promote capital market reform by ensuring listed asset quality.By Jason Ding and Nancy ZhengFinancial services drove the growth in domestic dealmaking,accounti

148、ng for 62%of the increase.+27%62%Government policies are encouraging M&A as a core value creation tool,clarifying hostile takeover principles,and pushing companies to improve price-to-book ratios to be greater than 1(or face delisting).The strong international appetite for Japanese assets in 2024for

149、 example,the Alimentation Couche-TardSeven&I($58.4 billion)deal or the Robert Bosch/Johnson ControlsHitachi Air Conditioning($3.5 billion)dealis expected to continue.Private equity investors,engagement funds,and activists have notable interest,thanks to low interest rates,ample opportunities to unlo

150、ck value in conglomerates,and low multiples.By Takashi Ohara and Shintaro OkunoOutbound technology deal value grew by 46%.Outbound value:$67 billion 7%year over yearJapanStrategic M&AMarket value:$143 billion 71%year over year24Outbound value:$42 billion 31%year over yearUnited KingdomStrategic M&AM

151、arket value:$133 billion 38%year over yearActivity is likely to continue to strengthen in 2025,as UK-listed companies are widely perceived as undervalued and could be potential takeover targets.Moreover,regulators have signaled some favorable shifts in the merger review process.Dealmaking by the UKs

152、 robust private equity community almost tripled in 2024,outpacing global growth rates for M&A by financial sponsors.The UKs financial investors are particularly active in the advanced manufacturing and services as well as energy and natural resources sectors.By Peter Horsley and Ted Rouseof total fi

153、nancial services deal value is domestic.80%Outbound value:$14 billion 129%year over yearIndiaStrategic M&AMarket value:$73 billion 16%year over yearDomestic dealmaking powered M&A activity,with scale deals predominant in construction and building products and scope deals predominant in pharmaceutica

154、ls,consumer products,and consumer tech.Indias maturing public market is fostering dealmaking,enabling buyers to raise capital and renewing financial sponsors confidence in public market exits.In a post-globalization world,India is attracting investment by global players that are reshaping their valu

155、e chains.To date,the focus has been on greenfield investments and local market listingsand more M&A and JVs are expected.By Vikram Chandrashekhar and Parijat Ghoshof inbound value is in advanced manufacturing and services.+27%46%25Significant consolidation occurred in energy and natural resources,in

156、cluding the megadeal between Italgas and 2i Rete Gas($5.8 billion)and moves by smaller players to integrate across the value chain.In Italys already consolidated telecommunications sector,future M&A activity will be limited following Swisscoms$8.7 billion acquisition of Vodafone Italia.Future deals

157、will focus on technology providers.A wave of consolidation is expected in financial services in 2025,triggered by UniCredits$10.5 billion bid for Banco BPM.By Andrea OldriniNearly half of outbound deal value is in advanced manufacturing and services,driven by Prysmians$4.7 billion purchase of Encore

158、 Wire.Outbound value:$15 billion 10%year over yearItalyStrategic M&AMarket value:$55 billion 171%year over year48%High divestiture momentum:13 of the top 20 strategic deals in Germany were divestitures,whether to reduce complexity,refinance core transformation,or survive amid industry disruptions.Eu

159、ropean energy independence has attracted domestic and international investment in German assets,such as Abu Dhabi National Oils$16.7 billion purchase of Covestro.Majority owners are buying back minority stakes at reasonable prices,such as Nder Holding buying back its stake in Ottobock from EQT.By Ka

160、i Grassof total technology deal value is outbound.Outbound value:$45 billion 68%year over yearGermanyStrategic M&AMarket value:$65 billion 7%year over year85%26Outbound value:$49 billion 10%year over yearFranceStrategic M&AMarket value:$52 billion 10%year over yearNearly half of strategic deal value

161、 is outbound and may increase in 2025 as French acquirers with healthy balance sheets look for international growth amid Frances domestic political uncertainties and pressure on public spending.Financial services more than doubled in deal value as major financial institutions with cash reserves acti

162、vely pursued M&A,such as BNP Paribas$5.5 billion acquisition of AXA Investment Managers.Declining European energy prices and profitability led to a greater than 80%drop in investments in French energy and natural resources assets.Players will likely seek outbound opportunities in 2025.By Arnaud Lero

163、i and Alexis de MeauxAdvanced manufacturing and services along with energy and natural resources are the largest industries by outbound deal value,making up a combined 49%.49%27%Domestic companies are fueling the market,with only 5 of the top 20 deals made with foreign acquirers.Its all about energy

164、.Half of the Brazilian markets strategic deal value involves energy deals,with many intending to spur the energy transitionenergy deals are up nearly 150%vs.last year.International investors continue to stay cautious because of the governments fiscal policy(which favors short-term growth)and lingeri

165、ng inflation.By Felipe Cammarata and Luis FrotaOutbound value:$3 billion 123%year over yearBrazilStrategic M&AMarket value:$41 billion49%year over yearAdvanced manufacturing and services is the second-largest industry in the Brazilian market,comprising 27%of the value.27Middle Eastern companies more

166、 than doubled investments in European targets.Strong interest in joint venture(JV)activities,particularly in industrial sectorsfor example,Saudi Arabias sovereign wealth fund completed three JV deals for solar and wind projects.Investor-friendly regulations in the UAE have more than doubled cross-re

167、gional strategic investments in UAE assets.By Tom De Waele and Gregory Garnierof total energy and natural resources deal value is outbound.Outbound value:$33 billion 9%year over yearMiddle EastStrategic M&AMarket value:$29 billion 52%year over year61%M&A in Aerospace&Defense:How Incumbents Can Respo

168、nd to Well-Funded Disrupters .29M&A in Automotive and Mobility:Hedging Bets until a Clear Future Emerges.31M&A in Building Products and Technology:Deals to Shape the Future .33M&A in Consumer Products:Carving Out to Grow.38M&A in Energy and Natural Resources:Making Deal Economics Work in a Record Ye

169、ar.45M&A in Financial Services:Coming Back to Life.50M&A in Healthcare and Life Sciences:Why Companies That Adapt to the New Realities Will Come Out Ahead .57M&A in Machinery and Equipment:Learning from the Best .62M&A in Media and Entertainment:Own the Consumer,Own the IP,or Own Nothing .67M&A in R

170、etail:A Reboundand No Sign of Letting Up.72M&A in Technology:Revenue and Cost Synergies in Tandem.77Telecom M&A:Here Are the Latest Deal Trends Worldwide.79Industries29INDUSTRIESM&A in Aerospace&Defense:How Incumbents Can Respond to Well-Funded DisruptersSuccessful incumbents will pursue acquisition

171、s that add capabilities and talent.By Michael Sion,Pierluigi Serlenga,Katherine Kajzer-Hughes,and John WenzelA surge in venture capital funding is positioning new entrants to take share from legacy defense companies.Winning incumbents will pursue M&A in a variety of formats to gain the technical and

172、 operating model innovations necessary to stay competitive.Defense has enjoyed a more than tenfold increase in venture investments over the past decade,making it an outlier among industries(see Figure 1 and the Bain Brief“Rethinking Defense:The Role of Private Capital”).Multiple factors are propelli

173、ng this boom,such as the growing gap between defense requirements and budgets,an innovation and affordability imperative,and increasing overlap between commercial and defense technologies.The success of companies such as Palantir and SpaceX is intensifying venture activity.Young companies built on t

174、hat capital are delivering innovation that is improving capability and reducing costand positioning those companies to take share.Incumbents should employ a number of defensive and offensive moves to hold off disruptive entrants.They must do a better job of delivering on schedule and at lower cost,a

175、nd they must ensure that they are meeting customer needs while also shaping the requirements of the future.At the same time,they can proactively reposition themselves against competitive threats by purposefully cannibalizing their own products or looking for other ways to creatively disrupt their ow

176、n markets.30Global M&A Report 2025Figure 1:Venture capital investment in defense has increased more than 18-fold over the past decade,from$500 million in 2014 to an estimated$8.7 billion in 202425201510Estimate$8.7 billion5020141516171819202122232024ECapital invested in venture capital deals,indexed

177、 to 2014 levelsDefense relatedEnergyITHealthcareFinancial servicesSource:PitchbookSuccessful incumbents will pursue acquisitions that add capabilities and talent.Importantly,they will rely on processes that ensure that integration does not stifle innovation or create significant cost structure chall

178、enges.Excessive integration within a parent organization could hinder innovative development models,restricting the benefits of unburdened cost structures.The goal will be to focus on whats unique(e.g.,talent,IP,technology,etc.)in order to deliver value.31INDUSTRIESM&A in Automotive and Mobility:Hed

179、ging Bets until a Clear Future Emerges More companies will opt for flexibility.By Dominik Foucar,Pedro Correa,Yuma Yano,Natasha Patel,and Ingo SteinThe automotive industry is in a state of uncertainty and mounting cost pressures,and the answer for many companies will be to pursue partnerships and al

180、liances instead of traditional M&A.Factors influencing the automotive M&A outlook include:Rising cost pressure for original equipment manufacturers and suppliers with underutilized capacities High uncertainty with volatile electric vehicle(EV)ramp-up across geographies Dual burden of investing in an

181、 EV future while maintaining internal combustion engine business limits available funding Required access to new capabilities and scale to achieve leadership positions with sustainable profitability Opportunity for partnerships and joint ventures with lower investment requirementsLow volumes and shi

182、fts in former growth markets such as China have hurt Western players.The ramp-up in electric vehicle(EV)batteries has been volatile,yet hybrid EVs continue to be a viable option,including another internal combustion engine powertrain upgrade.Overall,theres much indecision around original 32Global M&

183、A Report 2025equipment manufacturer strategies regarding software development,electrical/electronic architecture,and vertical integration with the high-voltage battery value chain.Amid these and other challenges,companies largely have held off on M&A in 2024,with value down around 80%and volume drop

184、ping about 60%during the first three quarters of 2024(see Figure 1).But activity is likely to pick up as companies acknowledge that they cant go it alone much longer.Because traditional M&A deals seem daunting during times of high uncertainty,more companies will look for joint ventures(JVs)or allian

185、ce arrangements that allow the flexibility to be competitive among different future scenarios.Such arrangements also require a lower investment than traditional M&A.GM established a$625 million JV with Lithium Americas to ensure access to critical minerals,and CATL and Hyundai signed a strategic par

186、tnership agreement to power future Hyundai EV models with CATL batteries.The best companies will model different future scenarios and actively consider them in their current decision making while,in parallel,taking the no-regret moves to help strengthen the business today.Partnerships can help compa

187、nies more speedily explore multiple technological paths.And once the tech path is clear,the right partnerships can be converted to full acquisitions while other,nonpromising paths can be discontinuedby scaling back JVs,for example.In both cases,successful companies are the ones that proactively shap

188、e their future.Figure 1:Amid challenges,automotive and mobility companies mostly avoided M&A in 2024Original equipment manufacturerDealerDeal countSupplierTechnology48205344Dip induced by Covid-19 and chip shortage224Strategic deal value,in billions of US dollars$80B356040200806040200201520162017201

189、820192020202120222023Q1Q32024Deal count325075Automotive and mobility companies largely have held off on M&A in 2024Sources:Dealogic;Bain analysis33M&A in Building Products and Technology:Deals to Shape the Future Acquirers are focusing their attention on five critical capabilities.By Renato Jorio,Ad

190、rien Bron,Nate Anderson,and Shounak GadreAt a Glance Companies are turning to M&A for capabilities that will address shifting profit pools.The top five capability imperatives are route to market,building automation,sustainability,industrialized construction,and technology.Building products companies

191、 are typically local businesses,which limits their opportunities for synergies across product categories and regions.Still,because local scale matters,companies are continuing to pursue rollups.In the building products industry,the smart companies are looking down the road and devising ways to use M

192、&A to buy the new capabilities that will define the industrys future.In a trend that will only grow more important over the next decade,companies will acquire to meet mounting demands for faster,more sustainable,and cost-effective constructionand to get out ahead of shifting profit pools (see Figure

193、s 1 and 2).INDUSTRIES34Global M&A Report 2025Where the industry is headedRoutes to market are changing rapidly,and the companies that take advantage of new sales and marketing approaches will outpace their peers.Home improvement retailer Home Depot acquired building products distributor SRS Distribu

194、tion in 2024 to accelerate its growth with the residential professional customer.The acquisition gives Home Depot access to a range of capabilitiesfor example,direct connections with professional roofers,landscapers,and pool contractors.Similarly,Carrier acquired Viessmann Climate Solutions for acce

195、ss to the companys portfolio of heat pumps and other machines,yes,but especially for access to its direct relationships with installers throughout Germany.After years of disappointing talks about smart homes and buildings,building automation is finally becoming a reality.Connectivity and the Interne

196、t of Things enable lower-cost and more open automation technology platforms that can be installed in buildings and augmented flexibly by various AI-supported apps and add-ons.These advances will create a wave of deals as companies in areas such as HVAC and electrical systems turn to M&A to enhance t

197、heir existing product lines.Thats why LG Electronics bought an 80%stake in Athom.LG will merge the smart home hardware developer and manufacturers connectivity capability(which links multiple appliances,sensors,and lighting devices)with the Figure 1:The deal mix in building products is increasingly

198、dynamic as companies turn to deals with multiple theses for growthBuilding products strategic deals greater than$500 million2321100%75255002018ScaleScope growthScale x scope growthScope capabilityScale deals build local positions of strength within an acquirers existing core,but they have become lim

199、ited in building products as consolidation has advanced,given that it is a local business with limited synergies across product categoriesScope growth deals expand into adjacent geographies or product categories beyond an acquirers core,and successful scope deals create a new platform for growth as

200、well as a path to leadership,building upon the acquirers parenting advantageScale x scope growth deals lead to both scale and scope expansionoften applied to large,multicountry deals,requiring the integration approach to be shaped by an assessment of business overlap in each country/subregionScope c

201、apability deals buy the new capabilities that will define the industrys future;five top capability imperatives are route to market,building automation,sustainability,industrialized construction,and technology(53%)2024Notes:Analysis includes majority deals only;2024 includes first quarter through thi

202、rd quarter onlySources:Dealogic;Bain analysis35Global M&A Report 2025generative AIenabled LG ThinQ platform.The plan:Create a smart home with optimal connectivity solutions by gaining a deeper understanding of the customer via AI.Sustainability is another big reason why more companies will pursue ca

203、pability deals.Real estate construction and operations generate roughly 40%of global carbon emissions.Customer expectations and stricter regulations are creating an imperative for sustainable,circular construction.For European industries,especially carbon-heavy ones such as cement,sustainability is

204、no longer an option.In 2024,Holcim bought Mark Desmedt and Cand-Landi Group,two companies active in the recycling of demolished building materials,to accelerate its decarbonization and circular construction initiatives.Theres less activity in other regions,with some notable exceptions.For example,US

205、-based Owens Cornings due diligence process now involves assessing how an acquisition target supports its sustainability goals or improves the targets sustainability profile.Figure 2:Profit pools will shift as the industry must meet demands for faster,more sustainable,and cost-effective construction

206、Global construction profit pool,2030Profit marginExpected change in.Profit marginRevenueDevelopmentGeneralcontractorsDistributionand logisticsSoftwareEPCs anddesignSpecialtysubcontractorsMachineryrentalMaterials and components7423561Developers will see higher margins from better executed projects,bu

207、t will face pricing pressure as risk declines1Diminishing role of general contractors,some consolidation,and specialization of contractors2Rapidly growing construction software and tech infrastructure7Increasing off-site construction drives new ways of distribution,while digitalization of supply cha

208、in pressures distributors,leading to a net dropNew value-added solutions and services businesses56RevenueOff-site constructionmethodsOEM commoditization partly countered by hardware enhancementOff-site construction to grow and capture higher margin as IDC reaches scale43TechinfrastructureSoftware in

209、tegrators andvalue-added servicesMachinerymanufacturingSources:S&P Capital IQ;Bain analysis36Global M&A Report 2025Industrialized construction will grow via deals,too.Modular,off-site construction is gaining real traction with M&A intended to integrate and consolidate the fragmented value chain(see

210、the Bain Brief“Breaking New Ground:The Efficiency Gains of Industrialized Design and Construction”).For example,in 2024,Renta Group acquired modular building specialist Caro Design.And for years,major lumber companies in the US,such as Builders FirstSource and US LBM,have been rolling up smaller,loc

211、al truss manufacturers,moving downstream in the value chain to broaden their capabilities in off-site construction.Technology such as digital twins and interconnected systems will revolutionize the construction value chain.Although few large tech deals have closed in recent years,it is quickly becom

212、ing a priority for CEOs who hope to replicate the success of the Builders FirstSource acquisition of Paradigm in 2021.Paradigm specializes in technology and software that helps building products players boost sales and reduce costs.Its Paradigm Omni product makes configuring and quoting windows and

213、doors fast and easy.We see such deals as the beginning of a new M&A era in building products that will be less about short-term synergies and more about acquirers securing the technology and tools that will define their future business.Meanwhile,as these deals expand capabilities for acquirers,some

214、building products companies will continue to use M&A for growthand in highly focused ways.Local scale and density still matter in this industry,which is why companies pursue roll-up plays in specific,fragmented markets.Even in bigger multiregional deals,value is typically created by multilocal integ

215、ration efforts.Cross-regional synergies are minimal and usually come from shared infrastructure,such as IT or operations,rather than commercial gains.While scale deals follow a logic of consolidation,scope and capability deals follow a logic of expansion.In the US,distributors such as US LBM and ABC

216、 Supply continue to take the roll-up approach.In Europe,large private equityowned distributors within the BME Group are pursuing the same type of rollups.But there is not a lot of hunting ground left in mature markets.In markets that are less mature,there are roll-up opportunities in categories with

217、 high weight-to-volume ratios,such as cement.For example,in 2024 Indias major cement players UltraTech Cement and Ambuja Cements acquired midsize regional competitors to capture market share.In any geography,such rollups work best for companies that have built their M&A strategy and a repeatable M&A

218、 capability to develop a robust pipeline of deals and extract deal value post-acquisition.37Global M&A Report 2025But in 2025 and beyond,the big story will be scope deals that deliver the five needed capabilities that will redefine the building products landscape.This is new territory for most compa

219、nies in the industry.How can they improve their ability to find the best deals and make them succeed?While scale deals follow a logic of consolidation,scope and capability deals follow a logic of expansion.Building products companies must develop a sharp thesis of customer needs and a thorough under

220、standing of the competitive forces at play in these adjacencies.That starts by asking how an acquisition and integration will create value as well as whether consumers will be willing to buy more or pay more for expanded offerings or capabilities.Is it a developer or an owner looking for a better RO

221、I on their building stock?Or are the engineer and specifier typically interested in respecting norms and ensuring build quality?Are the distributors looking for tighter ways to manage their categories?Or maybe it is those in construction trades or installers who will find ways to build faster,cheape

222、r,and with less rework?Understanding how such M&A expansions will affect the overall complex buying patterns within construction is the best place to start.38INDUSTRIESM&A in Consumer Products:Carving Out to Grow Consumer products companies are separating to enable more focus and simpler business mo

223、dels.By Peter Horsley,Maria Kurenova,Sam Rovit,Allison Snider,Joost Spits,and Dustin RohrerAt a Glance Despite a few large acquisitions,deal value dropped by 19%in 2024.Many are continuing to evaluate and divest low-growth and noncore parts of their portfolios.Our survey found that 60%of consumer pr

224、oducts executives expect to sell assets over the next three years.Success requires companies to look for ways to maximize value,not just split the business away.For two decades,the consumer products industry has watched its total shareholder returns(TSRs)steadily drop from one of the highest to one

225、of the lowest among industries.Reversing that fate requires companies to be aggressive about boosting volume growth and restoring profitability.For many in consumer products,the year 2024 was a time to evaluate portfolios and shed underperforming,noncore,and low-growth assets to double down on the a

226、reas with the highest growth potential and to simplify for profitability.Its been a steady trend.Even as overall deal value dropped after 2018,divestitures share of total M&A increased by 10 percentage points(see Figure 1).When we asked M&A practitioners in consumer products about their plans for th

227、e future,about 60%said that they expect to sell assets within the next three years compared with 42%across all industries.39Global M&A Report 2025It is no surprise that divestitures were on M&A practitioners minds in 2024.The consumer products industry already is more consolidated than most,and it f

228、aced the same macroeconomic headwinds as other industries,such as high interest rates and regulatory scrutiny that discouraged acquisitions.On top of that,consumer products companies find themselves burdened with two types of investments,including those for digital capabilities that theyve delayed f

229、or too long as well as for more resilient supply chains.All of this led to a 19%decline in M&A deal value in 2024 compared to 2023.Thats a long way from the industrys heady M&A years in the 2010s.In fact,the only 2024 consumer products deal valuation greater than$10 billion announced during the firs

230、t 10 months of 2024 was the Mars acquisition of Kellanova,which was the remaining core of Kelloggs after spinning off WK Kellogg,its North American ready-to-eat cereal business,a year prior.But the divestiture activity is another story because in addition to supply,there is adequate demand.As compan

231、ies prune their portfolios,theyre willing to selectively invest in other high-growth areas that are big enough to make a difference yet small enough to pull off.When we polled M&A executives in consumer products,30%said that they expect increased interest among corporate buyers for carve-outs over t

232、he next 12 monthsand around 40%of them anticipate more private equity interest.Figure 1:Even as overall consumer products M&A dropped post-2018,divesti-tures continued and gained share of total deal valueConsumer products strategic deal value,in billions of US dollarsDivestitures average percentage

233、share of total M&A value in consumer products$203B47%37%3491711791057912411215012120142018202220242014201820192023(19%)20142018 average($222B)20192023 average($114B)209Note:Strategic M&A includes corporate M&A deals(which includes private equity exits)and add-onsSource:Dealogic as of January 7,20254

234、0Global M&A Report 2025When breaking up is the answerConsumer products companies are separating to unleash growth by providing more focus and simpler business models.The most dramatic examples can be seen in consumer healthcare,in which splitting the consumer element from pharma has redefined the in

235、dustry.In 2022,GSK spun off its consumer health business into Haleon.A year later,Johnson&Johnson did the same thing with its consumer health business,creating Kenvue.Further separations do not feel far away,which,in turn,may give rise to industry consolidation and maturity in a fragmented market.Fo

236、nterra just announced the separation of its consumer business,for example.Consumer products companies are separating to unleash growth by providing more focus and simpler business models.The most dramatic examples can be seen in consumer healthcare,in which splitting the consumer element from pharma

237、 has redefined the industry.Companies are also separating as a way of exiting the low-growth parts of their portfolios that have become a drag on the rest of the businessand where there are likely better parents.Since 2015,Unilever has systematically divested businesses to reduce its exposure in fro

238、zen goods,teas,and margarine and other spreads.In 2024,the company extended that to ice cream.Companies such as Reckitt are following suit,with announced plans to sell its Essential Home business next year,which includes brands such as Air Wick,Calgon,and Cillit Bang.As part of this shift,were seein

239、g more creative divestiture structures,which is not surprising given the continuing valuation gap between buyers and sellers over price.Surveyed consumer products M&A practitioners told us that the top three most important factors in deciding to divest are stakeholder support,tax implications,and av

240、ailability of buyers(see Figure 2).In this climate,tax-free spin-offs or reverse Morris trusts appeal to certain sellers,and divesting to a joint venture is also an appealing option because it allows for participation in upside while gaining new investment in the business.41Global M&A Report 2025Fig

241、ure 2:With most consumer products survey respondents looking to bring assets to market,stakeholder support and tax implications are top considerations in their decision makingPercentage of consumer products practitioners considering a specific factor important when deciding to bring an asset to mark

242、etof consumer products practitioners are prepping an asset for sale within the next three years60%45%353025252525151010Stakeholder supportAvailability of buyersDeal valuation and sale priceNeed for cashReadiness forfunctionaldisentanglementTax implicationsCapacity to manage divestitureStranded cost

243、anddis-synergy impactChange in regulatory environmentEarnings dilutionimpactSource:Bain M&A Practitioners 2025 Outlook Survey(n=307)Getting it rightDivestitures arent easy.For one thing,boards and managements are focused on other pressing issues,such as transforming supply chains for better resilien

244、cy or implementing enterprise resource planning software.Just obtaining board approval for a divestiture requires thoughtful planning and coordinating with other priorities.Getting the value out of a divestiture requires running a program that is carefully tailored to the separation thesis.The best

245、companies balance speed,base business performance,and value creation.And sometimes theres the need to move quickly because delays create a negative spiral for the businessless focus and demoralized talent results in worse performance and therefore reduces the value.For others,theres a need to packag

246、e the business by pulling quick-win levers that will help attract buyers or investors and deliver on the equity story.42Global M&A Report 2025In consumer products,divestitures typically take 12 to 36 months from inception to close.They test executives decision-making abilities on everything from des

247、igning the appropriate asset perimeter and working through transition service agreements(TSAs)to managing talent in the interim.And ultimately,these deals often dont succeed.In fact,our analysis shows that only the top quartile of spin-offs delivered combined TSRs above the overall markets performan

248、ce within the three years following the divestiture(see the Bain infographic“When a Spin-Off Wins Big”).What can divestors do to boost their odds of success?We see five key steps to take for consumer products executives planning to divest.Step No.1:Start with a holistic view of your portfolio,and ma

249、rk businesses for exit in line with your strategy.There are some basic questions to ask:Are there still parenting advantages you have over the business?Where are there shared customers and capabilities?What is the sum-of-the-parts analysis,and where are investors discounting the business?Consumer pr

250、oducts companies can take a hard look at what categories fit better or those that are too different,and consider options such as different buyers,different aisles,and even different cost profiles as they evaluate their portfolios.Step No.2:Aim to maximize value through the perimeter and transaction

251、structure;do not just split the business.Think through how to bundle brands to spur volume growth and streamline costs.Also,think through what structure will maximize value.For organically grown businesses,tax-free spin-offs can minimize tax leakage of deal proceeds.For partial businesses or busines

252、ses requiring a turnaround,however,divestiture is often faster and requires a lower one-time cost to execute.Consider the need for cash and how proceeds will be reinvestedfor example,through M&A,buybacks,or debt paydown.And think through what an attractive asset perimeter is for an acquirer.Step No.

253、3:Accelerate decisions on the biggest entanglements.In 2021,we asked practitioners to name the top inhibiting factors for divestitures.Functional entanglement was No.1.For consumer products companies,the biggest entanglements often are around systems,shared production,and route to market.Thinking th

254、rough how to disentangle the business in a way that minimizes stranded costs and one-time costs can be a complex equation.Step No.4:Use the unfreezing moment to reshape the remaining companys profit-and-loss statement.A divestiture or spin-off is an opportunity to reshape the profit-and-loss stateme

255、nts(P&Ls)of both the divested company and remaining company.Building the pro forma P&L and disentangling the businesses will often expose stranded costs and bloated cost structures in the remaining company.Even for businesses that are already largely separate,there can be an opportunity to shift inv

256、estments to areas that line up with the remaining companys new focus.Step No.5:Keep 95%of people 100%focused on the base business.As with any transaction,running a divestiture can distract from the base business.When that business suffers,the economics of a deal sometimes becomes less attractive or

257、even untenable,and buyers may back out or spin-offs may be 43Global M&A Report 2025canceled.The best consumer products companies keep a focus on the base business by running a divestiture program with fewer,more highly dedicated individuals.What if youre the buyer?Among surveyed consumer products M&

258、A practitioners who have bought a carve-out within the past three years,70%say that their last carve-out acquisition created value.But even for experienced acquirers,these deals can pose risks.Heres our advice for buyers.Figure out what youre getting.Use cutting-edge diligence to assess and proactiv

259、ely address carve-out standing issues.In a carve-out acquisition,it is not always immediately clear what youre getting.In fact,“issues with the perimeter”was one of the top three carve-out challenges cited by consumer products M&A practitioners in our survey(see Figure 3).Diligence is the critical m

260、oment to dig deep into the people,systems,and assets(including brands and IP)that tell you where the new company will either need TSAs or a build-out/integration plan for Day 1.Develop an investment thesis.As with any M&A in any industry,the deal thesis is critical.With a carve-out in consumer produ

261、cts,there are likely specific levers that need to be pulled to increase growth,profitability,or both.Understanding these levers early on will help with carve-out diligence and integration planning.Figure 3:More than half of consumer products companies have a shared perspective on their top three cha

262、llenges in carve-out integrationsTop three challenges faced by consumer products companies in carve-out integrations,percentage of mentionsOther challengesIssues with the perimeter of the carve-outProcess and technology carve-out and integrationSeller negotiation on transition service agreements50%5

263、0%50%36%27%18%Cultural differencesInadequate cooperation from seller in coordination of functional migrationFunctional carve-out and integration issues Source:Bain M&A Practitioners 2025 Outlook Survey(n=307)44Global M&A Report 2025Remember,carve-out integrations are more complex than normal integra

264、tions.For practitioners with a repeatable integration capability,there are challenges to running a carve-out integration.The main difference is that Day 1 will be a hard cutover.This often means a heavier lift in sign-to-close planning to ensure readiness on Day 1.Two other considerations are TSAs a

265、nd dis-synergies.The bandwidth required to get these correct should be considered when setting up a program.Plan for and execute Day 1 in a way that mitigates risk and prepares for the future state.Because carve-outs are so complex,many companies see a successful Day 1 as the mark of victory.But the

266、 best carve-out acquirers understand that a smooth cutover on Day 1 is just the beginning.These companies plan for a Day 1 that enables future value creation.For example,one acquirer understood that procurement was a critical lever in its value creation plan,but there was only one procurement full-t

267、ime equivalent coming onboard within the perimeter of the carve-out.With this knowledge,the acquirer moved quickly to hire a top procurement executive who could start planning for Day 1 and beyond.45INDUSTRIESM&A in Energy and Natural Resources:Making Deal Economics Work in a Record Year The keys to

268、 generating higher deal value at a faster pace.By Whit Keuer,Arnaud Leroi,and Margaret PersonsAt a Glance Oil and gas companies enjoyed a wave of consolidation in 2024,and chemicals companies reshaped portfolios.The energy sector engaged in more than$400 billion in deals,a three-year record.Now,comp

269、anies across both sectors are striving to achieve deal value faster than ever.Acquirers are increasingly using generative AI to enable more robust and more reliable deal synergy estimates.While many companies pumped the brakes on energy transition deals in 2024,it was a record-setting year for conso

270、lidations by oil and gas companies anticipating a longer path for hydrocarbon demand.The energy sector saw more than$400 billion in acquisitionsa three-year highwith more than 10 megadeals,the biggest of which was the Diamondback Energy and Endeavor Energy Resources merger.There were also a host of

271、midsize deals,such as Chord Energy and Enerplus.All in all,the sector saw a shift toward scale deals,which comprised 86%of strategic M&A in excess of$1 billion.46Global M&A Report 2025Figure 1:In energy and natural resources,run-rate synergy value has increased,and the synergy realization timeline h

272、as acceleratedRun-rate synergy value as a percentage of deal value for 15 of the largest public energy and natural resources dealsAverage number of years required to achieve run-rate synergy for 15 of the largest public energy and natural resources deals20162016202420242.4%3.92.1 years1.5+63%29%Sour

273、ce:Bain analysisMeanwhile,in chemicals,forward-looking companies embarked on portfolio reshaping.Some companies divested assets as they strategically rethought the market segments and geographies that would offer the best opportunities for profitable growth and leadership.Another key theme was Middl

274、e Eastbased oil and gas companies moving into chemicals through organic and inorganic investmentssuch as Adnocs announced acquisition of Covestroand lowering their long-term risk from the energy transition.Overall,deal value in the energy and natural resources industries rose by 2%,and volume grew b

275、y 4%during the first 10 months of 2024 over the same period last year.As companies pursue different approaches to M&A,they find themselves racing to meet the same goalnamely,to generate higher deal value at a faster pace to make the deal economics work.Consider ConocoPhillips banking on its Marathon

276、 Oil acquisition to achieve$500 million of run-rate cost and capital savings in the first year following closing.Several upstream oil and gas companies have set timetables for achieving deal synergy targets by the end of year one while also increasing the focus on working capital,including inventory

277、 optimization.At the same time,midstream oil and gas companies are increasing the focus on commercial synergies and capturing value across the integrated value chain from“wellhead to the waters edge.”With intensified competition for the industrys best assets,acquirers must look at all of these lever

278、s to achieve their target deal economics.47Global M&A Report 2025These and other companies across the industry are taking advantage of the shifting dynamics that will make it possible to unlock more value faster.For example,forward-thinking companies are increasingly using generative AI capabilities

279、 to enable more robust and more reliable deal synergy estimates.Similarly,some companies are investing more rigor and planning to develop synergy realization plans during pre-close periods,allowing them to execute immediately at close and thus increase synergies that are created(see Figure 1).Lets l

280、ook at five ways companies are accelerating deal synergies.Robust,evergreen M&A pipeline managementTo win in the energy industrys active deal environment,successful companies are obsessive about the industry game board.They actively engage in scenario planning for different potential M&A combination

281、s,always preemptively evaluating strategic fit rather than waiting to react to shifting market dynamics.Many companies are even taking it a step further and proactively engaging in outbound activity to get deals done.We increasingly see that assets are not coming to market formally through investmen

282、t banks.Instead,successful deals are the result of informal connections or regular outreach among CEOs and M&A executives.Companies that choose to wait for formal processes risk missing out on the best potential deal opportunities.Higher standards for diligenceInterest rate increases caused 95%of st

283、rategic buyers to change their M&A approach,according to the energy and natural resources industry respondents to our 2024 M&A practitioner survey.The bar for sourcing and diligence is rising as the high cost of capital shrinks the margin of error for delivering deal returns.This means companies nee

284、d to work on generating better insights and developing higher confidence in synergies.It is no longer enough to apply broad brushstrokes of industry benchmarks.The best acquirers are relying on swiftly evolving tools and data to forge a tangible path to rapid synergies,and theyre engaging in stronge

285、r integration planning earlier.We see more companies deploying generative and traditional AI to quickly assess data from both parties and identify synergy potential.For example,companies can review large numbers of supplier contracts to identify procurement savings and even use generative AI to draf

286、t correspondence for the long tail of suppliers.The new technology also is being utilized to analyze customer data,market segmentation,and product portfolios to identify customer cross-selling opportunities.This is particularly critical in the early stages of deal formation to rapidly(and creatively

287、)assess the potential levers for value at stake.These models combine structured and unstructured data to screen hundreds of targets against a diverse set of criteria,including financial health,growth,market position,and even elements of the business model such as whether the target has a direct-to-e

288、nd-user channel.48Global M&A Report 2025Pre-close integration planningBeyond higher diligence standards,the best companies now devote more energy to translating the deal thesis into an integration thesis.Knowing the what is no longer enough;companies in energy and natural resources now need a clear

289、view of the how for delivering value.This imperative leads companies to engage integration teams sooner,spanning the full suite of planning from IT and systems to supply chains and operating model design.We see teams digging in earlier on what will be harmonized,how the integration will deliver quic

290、k wins for value,and what contingencies are needed.One common example in shale oil and gas involves establishing the asset and basin-level operating model and a common decision-making framework for operational teams.These teams make complex technical decisions as well as trade-offs between optimizin

291、g costs and maximizing production and recovery.So,its critical to define a companys decision process and decision accountabilities.Capabilities transfer in the integrationAs companies search for value,we find that the best acquirers consider opportunities to transform both the buyer and target compa

292、nies to deliver new value.There are fundamental questions to ask:What is the target best-in-class at?What are the learnings that can be expanded to a combined organization?What enables the target to perform exceptionally wellfor example,are there systems,structures,or specific behaviors at the targe

293、t company that the acquirer can learn from?What is core to the targets culture and ways of working?Where should it be maintained,and where will cultural fault lines need to be mitigated through thoughtful change management?Indeed,its a time to determine which improvement areas could be unlocked thro

294、ugh the targets capabilities and best practices(a.k.a.,reverse synergies).One shale oil and gas company believed that the target had a superior approach to completions in a particular basin and sought to apply the methods across its footprint.A chemicals company identified in due diligence that the

295、acquirer performed plant turnarounds faster and sought to apply those practices to its own assets.In the best of situations,the acquirer identifies how the integration can be a catalyst for deeper,more transformative change.Collaborating and learning from each other can begin in a pre-close environm

296、ent;its an especially valuable opportunity in deals with extended timelines.In addition to the exchange of information(of the not competitively sensitive variety),direct interactions with employees of the target companybe they through one-on-one interviews,surveys,or joint workshopscan accelerate th

297、e process of learning how each other works.49Global M&A Report 2025Culture integration focus to avoid eroding deal valueEnergy and natural resources M&A practitioners tell us that cultural integration is now a top three issue for any transaction.The goal of any deal is to secure its intended value.T

298、heres now industry-wide recognition that the tricky issue of merging cultures can make or break the integration and value delivery.Leading acquirers strive to mitigate cultural obstacles before even putting time into developing broader,full-potential culture plans.These players proactively identify

299、issues that could disrupt the integrationswe call these cultural fault linessuch as differences in purpose,decision making,or ways of working.A couple of issues we typically see involve differences in the level of detail of business performance reviews and in approaches to budget variances.Leading a

300、cquirers strive to mitigate cultural obstacles before even putting time into developing broader,full-potential culture plans.Also,its not uncommon to see differences in capital decision making,such as the level of rigor and number of scenarios required before making a final investment decision.If le

301、ft unaddressed,these differences could harbor misunderstanding and misinterpretation,sometimes taking years to unwind.The best companies use the pre-close period to identify and address these cultural fault lines and the issues they could create.Companies in energy and natural resources are also put

302、ting greater emphasis on defining a cultural thesis.They think through when to assimilate,when to preserve and protect aspects of the target culture and the processes that have enabled its success,when to bring the best of both organizations to bear,and when to use the integration as a catalyst for

303、cultural reinvention.The right answer will vary by deal and by the organizations teams.As many companies have discovered,culture is a bespoke problem that requires a bespoke solution.50INDUSTRIESM&A in Financial Services:Coming Back to Life Four sectors,four ways to use M&A to grow.By Joo Soares,Phi

304、l Anselmino,Markus Habbel,and Erin McCuneAt a Glance Banks will acquire for scale leadership and to share technology investments.Insurers will use M&A to refocus on core lines of business.In payments,fraud prevention and identity verification will be among the hot areas for acquisitions.In wealth an

305、d asset management,deals will continue to grow private market offerings.Technology,regulation,and shifting customer demands conspired to drive executives in the financial services arena back into the M&A market during 2024.Banks needed to get biggerfast.Insurers divested their way out of troubled po

306、sitions.Payments companies acquired for an edge in technology-driven scope deals.Wealth and asset managers sought deals that moved them into the territory of alternative asset managers,which were pursuing their own deals to build scale.While 2023 saw a slowdown in M&A activity across most sectors of

307、 the financial services industry,2024 brought a return to dealmaking and promise for the future.But the number of insurance deals slowed as companies recovered from underwriting challenges.While banking and finance accounted for the lions 51Global M&A Report 2025share of the deals in 2024,it was car

308、ds and payments that represented the biggest growth,putting 11-month total deal value across financial services 72%higher than it was during the same 11-month period in 2023(see Figure 1).Lets look at the highlights for each sector.Banking:Deals to share costs and boost profitsBanks are under pressu

309、re to keep costs under control as they grapple with the high cost of technology modernization as well as general inflation.In 2024,banks with an eye on profitability and a desire to defray technology investment costs turned to scale transactions to deliver meaningful cost synergies.The biggest was t

310、he announced more than$35 billion Capital OneDiscover deal in the US,a move that spanned both the banking and payments sectors and that promised at least$2.7 billion in synergies.In Europe,scale motivated BBVAs pursuit of Sabadell(with 850 million in synergies)and UniCredits regional leadership play

311、s,such as boosting its stake in Commerzbank and making a binding offer for Banco BPM,to name a few.North America saw consolidation among smaller regional players,including a tie-up between SouthState and Independent Bank Group.In total,banking M&A rebounded,with 215 deals greater than$30 million in

312、value announced by December 2024 compared with 151 deals announced during the same period in 2023.Figure 1:Financial services deal value was up in 2024Financial services M&A strategic deal value by sector,in billions of US dollarsFinancial services M&A strategic deal count by sector for deals valued

313、 at greater than$30 million2022$264B20330949740439920232024year-to-date202220232024year-to-dateInsuranceWealth and asset managementPaymentsBankingNote:2024 year-to-date includes deals announced from January through November 2024Source:Dealogic as of December 13,202452Global M&A Report 2025Figure 2:O

314、n average,global banks were more than twice as likely to be actively pursuing or open to pursuing M&A in 2024 vs.2023Acquisition perspectives at leading global banks Fall 202312%342.8x4.0 x1.8xFall 2024US top 50Europe top 25Asia top 25Fall 2023Fall 2024Fall 2023Fall 2024Actively pursuing acquisition

315、sOpen to acquisitions,not actively pursuingPerspectives reported6%6%181612%4%8%48321620%8%12%361620Notes:Includes only publicly traded banks and banks in which transcripts are readily available;assesses future interest in M&A and excludes integration of already closed dealsSources:Federal Reserve;S&

316、P 500 Financials;Bain analysisWe expect to see more scale M&A as banks aim for leadership economics and make further investments in technology.Bank executives are openly signaling interest in M&A:The number of banks open to acquiring or actively pursuing acquisitions jumped almost threefold among th

317、e top 50 US banks in 2024 vs.2023 and fourfold among Europes top 25 banks(see Figure 2).In the US,a more ambitious M&A agenda may be easier to pursue under the new federal administration,which is expected to be more open to banking sector M&A and to relax US banking regulations.The potential for a m

318、ore relaxed US regulatory environment will put more urgency on European banks to strengthen their competitive positions and improve efficiency and profitability via consolidation.The message for banks:Theres an urgency to act.Be proactive in identifying potential acquirees that will deliver leadersh

319、ip economics,and be prepared to articulate ambitious cost synergy targets to be competitive in a consolidating market.Insurance:Deals to sharpen a business focusInsurance dealmaking in 2024 has been characterized by divestitures and some scale consolidation plays.Deal value rose slightly,at$77 billi

320、on by December 2024 compared with$50 billion in December 2023,even as deal volume declined to only 72 deals during the period compared with 95 for 2023.53Global M&A Report 2025Portfolio reshaping,a characteristic of 2024,will continue into 2025,with carriers working their way out of troubled underwr

321、iting positions,balance sheet impairments,and ratings downgrades(see Figure 3).We expect continued pruning of subscale lines and geographic portfolio reshaping in multinationals.Noncore lines will be jettisoned to better owners,following the example of Allstate and its exit of the employer voluntary

322、 benefits business.Geographic footprints will be assessed for the appropriate use of capital along with growth and profit potential.Allianzs divestiture of its US MidCorp and Entertainment businesses will not be the last of the geographic portfolio reshaping for the multinationals.As the industry pu

323、ts the challenges of 2023 and early 2024 behind it,the stage will be set for more transformative growth-oriented activity,as characterized by two market-defining transactions during the last month of 2024namely,Gallagher acquiring AssuredPartners and Aviva buying Direct Line.And the industry saw a n

324、ew wrinkle in brokerage consolidation in 2024,with the big strategics acquiring large private equitybacked platforms.Aon,Marsh,and Gallagher all picked up scale assets,and we expect more to come in 2025.Strategics provide a viable path for private equity funds looking for exits,especially for the pl

325、atforms that are“too big to buy”for the fund-to-fund trade and that are not ready for an IPO exit.If a more favorable regulatory environment emerges,especially in the US,we will see a continued reshuffling of the brokerage leaderboards across markets.Figure 3:In 2024,insurers slowed on overall deal

326、activity,using divestitures to strategically reshape their portfolios20193345802560344320292827321005005020202021202220232024year-to-dateInsurance sector total deal value and divestitures,in billions of US dollarsTotal divestiture valueTotal deal valueNet deal valueNote:Net deal activity is calculat

327、ed by subtracting the total divestiture value from the total acquisition valueSource:Dealogic as of November 5,202454Global M&A Report 2025Figure 4:Payments companies are using strategic M&A to accelerate innovation and global growthMost attractive themesInvestment thesesDeal examplesPotential acqui

328、rer examples:Continued tailwind of rising digital payment penetration,with varying intensity by geographyIntegrated payment and embedded finance momentum intensifiesMoney movement infrastructure build-out and demand for lower-cost and data-rich transactionsValue-add services augment transaction reve

329、nue and increasingly are a key source of differentiationEstablished market positions reward operational excellenceMore merchant services consolidation and capability building,including:Acquirer consolidation Smaller payment service provider scale-up Geographic expansion and localization toolsVertica

330、l-specific capabilitiesCompliance and underwriting assets that foster trust and mitigate risk of bank-fintech partnershipsFraud and risk management tools for account-to-account transfers and to mitigate bad actor use of generative AI Open banking,interoperability of schemes,monetizing ISO 20022 inve

331、stmentsIdentity and fraud detectionWorking capital for small and midsize businessesModernization of legacy hardware businesses StripeLemon Squeezy/Bridge GlobalPaymentsTakepayments Dgpays/ArcapitaNeopay Talus PayJobox.ai/Clarus PaylocityAirbase CorpayPaymerang TarabutVyne MastercardMinna American Ex

332、pressRooam VisaFeaturespace Mastercard Recorded Future NCR VerifoneSource:Bain analysisWhat should carriers and brokers be doing to make M&A a core part of the growth strategy?We say follow the“three Ps”:Be proactive in assessing targets and in trimming portfolios.Be prepared to move fast in diligen

333、ce,as the best deals will be heavily contested.Be preemptive in pursuing opportunities,as the best deals are those not yet for sale.Payments:Deals to ride the payments digitization waveThe year 2023 was a dry spell for M&A in the payments sector,with funding shrinking,young fintechs withering,and rising interest rates freezing strategic deals and private equity activity.That changed in 2024.55Glob