Our study examines which M&A strategies and transaction structures companies and private equity firms will be focusing on in 2025

Our latest study highlights the most important trends and challenges in the area of mergers & acquisitions (M&A). One of the key findings is that decision-makers at German companies and private equity firms expect transaction activity to increase in 2025 despite persistently uncertain market conditions. Sustainable, strategic growth remains the primary business objective for companies. 77% of respondents are planning at least one deal in 2025. While acquisitions remain one of the leading deal structures, joint ventures and strategic alliances are also gaining in importance.

The most important findings at a glance:

- Transact to transform: Companies are using mergers and acquisitions to transform their business models and acquire the necessary AI and digitalization capacities. Technology transactions accounted for the majority of transactions in 2024.

- Geopolitical risks: Cybersecurity threats to transactions are seen as the most significant geopolitical risks, while ongoing political conflicts and elections play only a minor role in deal considerations.

- Getting a deal done: Large valuation differences between buyer and seller as well as legal disputes continue to pose the greatest challenges in transactions.

- Interest rate environment: Most companies see stable interest rates at the current level as an appropriate basis for a consistent transaction volume. However, in order to significantly increase their merger and acquisition activity, interest rates need to fall substantially.

- Deal activity in 2025: 77 percent of respondents plan at least one transaction in 2025 and expect the overall M&A market to increase.

To the study

The study offers valuable insights into current and future M&A trends and challenges. To illustrate the dynamics, we present the first M&A Outlook 2025 for German companies and private equity firms. From the end of October to mid-November 2024, we surveyed around 200 decision-makers from the M&A environment to find out how current market conditions are affecting transaction activity. We investigated the extent to which companies and private equity firms are planning M&A strategies, the types of transactions they expect and the primary drivers and obstacles shaping the market. This also allowed us to compare the perspectives of companies and private equity investors.