Hello there!
As we head into August, it’s a great time to pause and take a closer look at the trends shaping the private equity landscape. If you are wondering why we are suggesting this, it is mainly because private equity is a major driver of M&A in 2025, with more than $2 trillion in dry powder.
Investor appetite for exits is increasing, as the average buyout hold period in 2024 was approximately 6.7 years, still elevated compared to the long-term average of around 5.7 years but improving from 2023. While sponsor-led deal volumes are starting to approach historical highs, they remain well below 2021 levels.
In 2024, PE accounted for $398 billion (22% of M&A activity) in the Americas, $243 billion (29%) in EMEA, and $126 billion (16%) in APAC, all of which were down significantly from 2021. This gap suggests substantial capacity for growth if market conditions remain favorable.
Market Snapshot: Global State of the M&A Market
Last year, M&A activity continued to face the same headwinds that had persisted for three years, as dealmakers waited for better conditions. Private equity and venture capital firms largely held onto their portfolios rather than selling at discounted prices, and with reduced competition, many deals remained on hold.
On the other hand, companies learned to thoughtfully adapt their M&A strategies and processes to stay ahead of any potential macroeconomic or political situation.
In 2025, global M&A is showing real staying power, despite recession risks, geopolitical uncertainty, and trade tensions. This comes as a signal that dealmakers are finding ways to complete transactions in any market. In the first half of the year, $2.0 trillion in deals closed across 24,793 transactions, marking year-over-year growth of 13.6% in value and 16.2% in volume.
The second quarter alone generated around $1 trillion in deal value, a slight decline from Q1 but still 13.4% higher than the same period a year ago. For investors, this resilience points to a market where strategic consolidation, sector rebalancing, and more realistic valuations are aligning to create opportunities, even as volatility persists.
Regional Deep-Dive: How is Europe Doing?
Europe, meanwhile, is enjoying a capital-cost advantage, thanks to one ECB rate cut in Q2 (June 5, 2025) versus the Fed’s pause—and a stronger euro, which has fueled robust European acquisitions of North American targets. Notable examples include Nordic Capital’s acquisition of U.S.-based Anaqua (~$3 billion) in February 2025 and Arcadia in July 2025. In addition, Europeans completed nearly 500 outbound deals into the U.S. in 2024, worth roughly €85 billion, highlighting a growing value-over-volume dynamic in transatlantic mergers and acquisitions.
IT was the only sector to post quarter-over-quarter growth in deal value, up 36.6% in Q2. Consolidation is expected to continue in margin-pressured industries, such as the automotive and chemical sectors, where tariffs and supply chain disruptions are impacting performance.
Sectors such as aerospace and defense are also attracting interest, supported by higher defense spending and favorable national security policies. Here, the M&A momentum is being fueled by an unprecedented wave of private capital.
Incumbent defense firms are responding by pursuing acquisitions that add specific capabilities, intellectual property, and talent. Integration strategies are increasingly designed to maintain the acquired company’s innovation capacity and cost structure advantages.
What to Expect for M&A in H2 2025
Interest rates remain a wild card – Long-term rates are still high, especially in the US, despite some central bank cuts in Europe.
Pressure on valuations. Higher public debt and slower growth prospects can weigh on corporate earnings and reduce valuations, making sellers reluctant to transact unless absolutely necessary.
Secondary market innovations. Continuation funds and other secondary structures are emerging as tools for Private Equity to return capital to investors while keeping certain assets in their portfolios.
Geopolitics and trade policy noise. Ongoing tariff uncertainty and heightened geopolitical tensions add another layer of unpredictability. While no one can predict the next major shift, dealmakers will need to remain nimble and prepared for sudden changes that could impact valuations, supply chains, or market confidence.
Improving Deal Execution at 0100 International: Panel — “M&A in Italy: Navigating the Evolving Golden Power Rules”
Italy’s Golden Power regime continues to evolve, and so do deal strategies. This panel will bring you what’s new, how recent rulings are shaping outcomes, and what investors can do to keep transactions on track. We’ll dive deep into screening targets, structuring for approval, managing filings and remedies, and protecting value without slowing momentum, a discussion for those involved in deal execution, from investors and counsel to portfolio leaders.
You’ll hear from:
Giuseppe Franze, Partner, Rivean Capital — Heads Rivean’s Milan office and leads the firm’s investments in Italy. Previously at Hg in London, with earlier roles at Apax Partners and Merrill Lynch in Milan and London. Holds an Industrial Engineering master’s from Parma University and an MBA from Harvard Business School.
Massimo Vendramini, Managing Director & Head of Southern Europe, AURELIUS — Drives origination and execution across Southern Europe, with deep experience in mid-market deals involving international operations, add-ons, and exits. Started his career in Investment Banking at Deutsche Bank in London and holds an MSc in Finance from Bocconi University.
Giacinto D’Onofrio, Senior Partner, Aurora Growth Capital — Italian dealmaker expert. Before joining Aurora, he spent 15 years at Trilantic Europe, focusing on Italy, following a decade at Lehman Brothers, where he worked across Investment and Merchant Banking in London and Milan. Graduated magna cum laude in Business Administration (Corporate Finance) from LUISS University in Rome.
🌍 Across the Ecosystem | News & Useful Resources for You
M&A activity remains in focus as dealmakers adapt to high interest rates, shifting valuations, and cautious market sentiment. Private equity continues to play a significant role in driving transactions, while early-stage exits dominate in several regions, underscoring ongoing challenges in late-stage funding.
Here’s a spotlight on recent developments and data points shaping the current M&A environment:
🗞️ News | H1’s Biggest M&A Deals
In the first half of 2025, European M&A activity experienced a slight increase, with 433 exits recorded compared to 420 in the same period last year.
B2B SaaS dominated sector activity with 193 deals, while fintech, consumer tech, climate tech, and healthtech also showed strong momentum. Niche segments such as foodtech, HR tech, and legal tech saw notable consolidation.
🗞️ News | Czech defence tech CSG considers IPO as European governments arm up
Czechoslovak Group (CSG), one of Europe’s largest private defense companies, is weighing an IPO that could value it at more than €30 billion. Last year, CSG generated €4 billion in revenue and supplied over a million rounds of artillery ammunition under a Czech government initiative.
The company has also been expanding through acquisitions, including the $2 billion purchase of U.S. ammunition maker Kinetic Group and an interest in acquiring Iveco Group’s defense unit. The potential listing comes amid surging European defense budgets and growing investor interest in the sector, with defense stocks outperforming broader European equities since 2022.