U.S. M&A Boom 2025: Big Deals Surge Amid Regulatory & Economic Crosswinds

This “deal economy” phenomenon reflects a divergence between financial-market activity and the broader economic experience. The Economist signals that while real-economy indicators such as wages, inflation, employment growth (outside certain sectors) and consumer sentiment are mixed or weak, large mergers, acquisitions, leveraged buyouts, AI-driven investments and mega-deals are accelerating. The number of deals worth more than US$10 billion is rising swiftly, approaching historical highs [1]. Transaction counts for deals over US$100 million are growing (~9% in 2025 over 2024), while their total value is up ~36% [2].

Key factors behind this acceleration include favorable financing costs—credit spreads have compressed—thereby enabling debt-heavy large deals; corporate balance sheets are relatively resilient; and valuation gaps between buyers and sellers are narrowing [2]. There’s also a regulatory environment shifting toward faster approvals of bank mergers, lighter scrutiny of corporate mergers, and broader antitrust policy that is perceived as more permissive under the current administration, all encouraging deal flow [1][3][6]. Strategic priorities are increasingly driven by tech transformation and AI—companies are acquiring data center capacity, seeking horizontal scale, and integrating AI capabilities into core operations [2].

However, the boom isn’t uniform. Many smaller and middle-market deals are lagging, with deal volumes in those segments declining even as value is concentrated in big deals [2][5]. Meanwhile, soft indicators—consumer confidence, business orders, labor market momentum—are showing signs of weakening [3][4]. Inflation remains sticky in sectors like services. Policy instability—tariffs being announced, reversed, delayed—and ambiguity in regulatory enforcement generate uncertainty undermining investment and consumer sentiment [4][6].

Strategic implications for investment banking include prioritizing capacity for mega-deal advisory, PE exits, cross-border transactions in AI/tech infrastructure and financial services; repositioning risk analysis frameworks to account for policy/disruption risks; as well as calibrating client expectations for smaller deals in a high-value deal environment. Open questions remain: how long can cheap debt persist? Will regulatory shifts be durable or subject to rollback? Can the real economy catch up with deal activity, particularly for middle income and consumer sectors?