Twenty years of historical survey data reveal a clear trend: the U.S. M&A market is only as strong as the underlying economic conditions. This axiom is once again evident in Dykema's 20th Annual M&A Outlook Survey, where more than 200 senior executives and dealmaking advisors expressed growing optimism for the year ahead.
A hearty 70% of respondents expect a stronger U.S. M&A landscape in the next 12 months, driven by improved financial markets, the availability of capital, and a stabilizing economy. And increasingly, quality targets and company valuations are seen as key drivers of current and future transactional activity.
“This mounting optimism is somewhat tempered by persistent concerns around economic volatility and increased regulatory oversight,” said Jeff Gifford, a member of the firm’s Executive Board. “For instance, a majority of respondents believe the FTC’s stricter merger reviews could stifle deal activity in the year ahead, and in response, 75% of dealmakers plan to ramp up their due diligence to assess potential antitrust risks in their target companies.”
Though these regulatory concerns are particularly heightened in healthcare and energy—whether due to potential FTC investigations into oil and gas consolidation or scrutiny around healthcare outcomes—these sectors, along with financial services, are anticipated to see the most deal activity in 2025. Healthcare M&A is expected to be driven by efficiency improvements and the need to adopt new technologies, while the energy sector’s focus will be on renewables and clean energy investments.
Nearly seven in 10 dealmakers also believe private equity investors will drive M&A growth in 2025, as firms look to deploy $2.5 trillion in available capital, despite recent challenges such as lower valuations and reduced deal activity. “Economic volatility, limited exit opportunities, and misaligned valuations remain the biggest hurdles, but dealmakers are turning to creative strategies like dividend recaps and alternative funding arrangements to overcome these obstacles,” said Frank Ballantine, Dykema M&A Survey Leader. “With long hold periods dampening returns, PE firms are finding new ways to put capital to work and generate value.”
Separately, AI is transforming industries and rapidly becoming a key deal driver. Nearly three-quarters find that companies are seeking to integrate AI capabilities, acquire businesses leveraging the technology, and use it to streamline M&A processes. “AI is no longer a ‘nice-to-have’—it’s becoming a cornerstone of M&A strategy,” said Wilhelm Liebmann, Director of the firm’s Business Services Department. “Executives see AI not only as a tool for improving operations but also as a differentiator that can enhance business valuations. However, balancing AI's potential with risks like data privacy must be top of mind."
Other significant findings from the report include:
- 77% of dealmakers feel that regulators have increased their scrutiny of M&A deals. As a result, 80% have increased their emphasis on due diligence in the past 12 months.
- Over half of respondents believe the automotive M&A market will strengthen in the next 12 months, driven by a shift to hybrid engines, the need to increase supply chain resiliency, and collaboration between automakers/suppliers and technology providers.
- ESG's influence on dealmaking is fading, with only 55% of respondents prioritizing it in target selection—down from last year—and one-third now saying they are unlikely to screen for ESG risks, compared to 19% in 2023.
- Similar to results from the 2023 report, respondents anticipate the healthcare, energy, and financial services industries to see the most M&A activity in 2025.