Global M&A resilient to tariff shock as executives lean in with dealmaking to exploit disruptions--Bain & Company M&A Midyear Report

Leading companies will pursue multi-year M&A roadmaps to secure scale advantage, expanded capabilities and future-proof portfolios amid volatility

BOSTON, June 27, 2025 /PRNewswire/ -- Global mergers and acquisitions activity by leading companies is set to remain robust this year despite ongoing tremors from tariffs inflicting the third significant shock in five years to corporate executives' confidence in the business environment, Bain & Company forecasts today.

Unpredictable shifts in tariffs policies are again heightening uncertainty over M&A decision-making, in the wake of earlier shocks from, first, the Covid-19 pandemic, and then soaring interest rates. But Bain's M&A Midyear Report concludes that the tariffs shock will be different, with executives who have weathered past crises drawing from the lessons to pursue bold strategic moves.

Today's analysis anticipates a new wave of M&A dealmaking as companies focus on future-proofing businesses through greater scale, expanded capabilities, and strategic divestitures – despite continuing challenges from persistently higher rates, regulatory hurdles and AI disruption, as well as tariffs. The best companies are already working to determine how second- and third-order impacts from tariffs could alter the portfolios, M&A roadmaps and deal pipelines, Bain's report says.

Bain notes that it is already seeing evidence that leading companies are not allowing tariffs – or the shift to a more multipolar world that they represent – to derail M&A plans. In one significant indicator of resilient M&A activity, the report notes that while deal volume and value dropped in April as the tariff era began, deal value rebounded in May: a signal that tariffs' impact may be more muted than that of other recent shocks.

Overall, the strategic M&A market has grown 11% year-over-year through May. While the May bounce may partly reflect late-stage deals announced that month, Bain concludes that a bigger factor is that battle-hardened executives are becoming more strategic in exploiting disruptions to their advantage. These leaders are responding more nimbly to strategic challenges and keeping focused on a longer-term view of their M&A strategy, the report argues.

"In the present, challenging environment, it takes unique conviction and clarity to chart a multiyear strategy and proactively pursue M&A. Yet that's just what veteran executives are showing us they can do," said Suzanne Kumar, executive vice president of Bain & Company's M&A and Divestitures practice. "These executives are separating the signal from the noise and plowing ahead with transformations. Indeed, company leaders with a clear M&A roadmap grounded in a multiyear view will be best positioned to see past near-term volatility and identify unique opportunities for their businesses to make transformative moves."

M&A learnings from past shocks chart a course through ongoing challenges

While taking an upbeat view of M&A prospects for the year, Bain acknowledges ongoing challenges for dealmakers. As they navigate swings in tariff policies and financial markets, executives also confront accelerating disruption from technology, especially AI, and intensified pressure to allocate capital to these and other newly critical capabilities, sometimes at the expense of M&A investments.

The report notes that interest rates are likely to remain relatively high in the US amid ongoing inflationary pressures. Regulatory hurdles also remain elevated across markets, with the US administration maintaining antitrust scrutiny, even as it brings back merger remedies and streamlined processes, Bain observes. The report also notes that the impact from tariffs has also varied markedly across sectors, depending on factors such as supply chain dynamics and end markets. Industrial M&A has been hit harder, suffering a 15% drop in deal value, while tech M&A has rebounded as companies across industries snap up AI assets.

Yet while executives navigate these disparate challenges, Bain's analysis identifies four key learnings from past crises that the most effective companies are applying to chart successful M&A strategies.

First, companies that leverage their strength to continue to pursue M&A outperform those which stand still, Bain finds. Citing bold dealmaking during the global financial crisis of 2008, it reports that in the first half of 2025 some companies have now pursued opportunistic and strategically solid deals at lower valuations than were available at the same time last year.

Secondly, Bain notes that forward-looking companies are continuing to recognise that disruptions generate demand for new capabilities, creating a strategic rationale for scope deals. The wide-ranging disruptions sparked by AI open up the pursuit of game-changing capabilities through M&A, it suggests.

Thirdly, leading companies will continue to pursue consolidation deals as high interest rates and persistent cost pressures favor scale deals, the report concludes. Bain expects consolidation deals to continue to define the M&A market this year, especially in high-fixed-cost industries such as financial services, energy and telecommunications.

Lastly, the report advises that the best businesses will continue to seek to expand their competitive advantage by examining how follow-on effects of tariffs will affect portfolios, M&A roadmaps and deal pipelines. Leading companies will screen potential assets to map their manufacturing footprint to the future shape of end markets, and update demand models to consider effects from slower global growth, supply chain realignments and shifting consumer behavior, it says. Alongside, the most effective companies will also strategically divest businesses which are no longer core, or where ownership advantages will not be the same in the future.

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