Personally, our foolish prediction for 2025 was that Rihanna would finally release new music, and, well, that song for the Smurfs movie doesn’t count. So, we’re 0–1 predictions-wise this year.
We’re not alone: Dealmakers expected a very different 2025 than we’ve had so far.
“If we were to look back 12 months and six months, I think we all were looking for 2025 to be a banner year for M&A,” Kevin Desai, US deals platform leader at PwC, said at a talk with reporters tied to the firm’s 2025 midyear deals outlook. “I think with the new incoming administration, what was thought to be a more business-friendly environment with interest rates coming into clarity, with inflation coming down, it was poised to be a good year.”
But it hasn’t exactly been a good year, with deal volume (4,535) and value ($567 billion) remaining flat compared to 2024, per PwC’s midyear outlook. That’s actually something of an accomplishment, Desai pointed out, “just given the level of new uncertainty.” Still, not the year some may have expected.
In May, a PwC survey found that about 30% of executives responding had paused or planned to revisit deals because of tariffs. “When you look at it across sectors, it’s interesting that it’s affecting all sectors relatively equally, even financial services, telecom,” Desai noted.
It goes to show just how destabilizing tariff policies have been on executives’ decision-making processes lately (though you already knew that).
“From a boots-on-the-ground perspective, the C-suite is being held to the fire by boards on two questions: What are the impacts [of tariffs], and what are our options?” Mark Truchan, a partner in PwC’s customs and international trade practice, said at the same event. “And in many cases, the C-suite is asking for daily briefings on these topics, and many organizations never had the tariff infrastructure to be able to respond.”
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But even though tariffs clearly rattled the M&A market in the first half of the year, there are some bright spots, as well as signs of a potential rebound ahead. In May, for instance, Desai noted, there were more mega deals (or deals of $5 billion in value or more) than in the previous three years.
When asked about pursuing new mergers and acquisitions, 51% of executives PwC polled in May said they have initial steps underway, while 20% were already beyond initial steps. The firm noted that now, “the question is exactly how long it will take to reach a policy equilibrium in which C-suite leaders are comfortable deploying capital on major new investments.”
And for all the political uncertainty of the first six months of the year, it’s far from an all-hope-is-lost moment.
“We believe that as the policy umbrella gets unveiled a little bit and we think about what's going to happen with the budget package and what's going to happen with trade policy, there is a tremendous amount of pent-up demand, not necessarily to do deals for deals' sake, but there are true market factors that are driving companies that need to rethink the positioning of their business, and we're hopeful that the rest of 2025 will start to look different as the policy picture comes into clarity,” Desai said.