H1’25 highlights
M&A volume rises despite deal count dropping to five-year low
In H1’25, the number of announced M&A deals fell 10% YoY to 24,047 globally, down from 26,687 in H1’24. However, total deal value increased by 33% to USD2.0 billion, marking the strongest start to a year for dealmaking since 2022. Regionally, M&A activity rose by 13% in the US and 82% in APAC. The US contributed 43% of global deal volume, its lowest share since H1’22. In contrast, Europe experienced a 4% decline compared to 2024, reaching a two-year low. High interest rates, geopolitical tensions, and economic uncertainty driven by tariffs continued to dampen global M&A sentiment. Despite these challenges, the technology and financial sectors led the market, accounting for 18% and 17% of total global deal value, respectively.
Global debt capital market activity remains strong
Global debt capital market (DCM) activity remained strong in H1’25, reaching USD6.4 trillion, up 13% compared to H1’24. This represents the most robust first-half performance for DCM activity since 1980. The number of new offerings introduced during H1’25 rose by 5% YoY to an all-time high of just over 18,000. Investment-grade corporate debt issuance grew by 9% compared to the same period last year, marking the strongest start on record for global high-grade corporate debt. Meanwhile, high-yield debt issuance remained unchanged from H1’24 levels. Green bond issuance totaled USD268 billion, reflecting a 2% decline from H1’24. However, on a QoQ basis, green bond activity increased by 9% compared to Q1’25, signaling renewed momentum in sustainable finance. From a sectoral standpoint, the technology, consumer staples, and materials sectors recorded double-digit percentage growth in DCM activity compared to H1’24.
ECM activity reaches four-year high
In H1’25, global equity capital market (ECM) activity rose to USD322 billion, reflecting a 1% YoY increase and marking the strongest first-half performance for global ECM activity in four years. The US accounted for 35% of total issuances, with proceeds rising 5% compared to H1’24. Similarly, ECM activity in China doubled YoY, reaching its highest first-half share of global ECM activity in the past two years. Global initial public offerings (IPOs), excluding special purpose acquisition companies (SPACs), totaled USD49 billion, down 3% YoY, making it the slowest first-half for IPOs since 2016. IPO proceeds on US exchanges declined by 13% YoY, hitting a two-year low. Convertible offerings reached USD68 billion, up 16% YoY, and accounted for 21% of total ECM deals. The technology, energy & power, and financials sectors were the most active, collectively contributing 66% of all convertible issuances in H1’25.
Top five M&A deals (H1’25)
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Date of announcement
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Acquirer’s Name
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Acquirer’s Location
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Target
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Target’s Location
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Value (USD billion)
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Target’s Industry
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Deal type
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|---|---|---|---|---|---|---|---|
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Jul 29, 2025
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Union Pacific
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US
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Norfolk Southern
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US
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71.5
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Industrials
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Cash & stock
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Jun 3, 2025
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Toyota Fudosan
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Japan
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Toyota Industries
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Japan
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25.9
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Industrials
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Cash
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May 16, 2025
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Charter Communications
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US
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Cox Communications
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US
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24.1
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Media
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Cash & stock
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Apr 17, 2025
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Global Payments
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US
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Worldpay
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US
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24.3
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Financials
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Cash & stock
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Mar 18, 2025
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Alphabet
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US
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Wiz
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US
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32.0
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Tech
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Cash
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Investment banking revenues rebound amid improved market conditions
In H1’25, investment banking revenues across major banks rebounded, driven by improved global market conditions. However, both equity and debt underwriting activities continue to face challenges. The resurgence of mega deals, increased boardroom confidence supported by strong corporate earnings, expectations of potential interest rate cuts later this year, and buoyant capital markets were key drivers of this recovery. Looking ahead, market performance is expected to strengthen in 2025, supported by pentup M&A demand and a robust deal pipeline, provided macroeconomic conditions remain stable amid tariffs, trade policy, and inflation.
Note: Revenues for Deutsche and Barclays were converted into USD using the exchange rate as of June 30, 2025
Revenue for Deutsche Bank reflects revenue from Origination & Advisory services
Bulge bracket investment banks – H1’25 highlights
JP Morgan’s investment banking fees rose 7% YoY in Q2’25, driven by higher debt underwriting and advisory fees, partially offset by a decline in equity underwriting fees. Advisory fees increased 8% YoY, supported by heightened sponsor activity, while debt underwriting fees climbed 12%, primarily due to a few large deals. In contrast, equity underwriting fees fell 6% YoY. The bank maintains a strong pipeline, and its outlook, along with overall market tone and sentiment, is notably more optimistic.
Goldman Sachs’ investment banking fees rose 26% YoY in Q2’25, primarily due to significantly higher net revenues in advisory, partially offset by a slight decline in debt underwriting revenues. The investment banking fee backlog increased QoQ, mainly driven by growth in advisory, where net revenues surged 71% YoY compared to Q2’24. The upside reflected strong performance in the Americas and EMEA. Equity underwriting net revenues remained largely unchanged, while debt underwriting declined due to reduced leveraged finance activity. The bank remains optimistic about its 2025 outlook and anticipates a further increase in M&A and IPO activity.
In Q2’25, Morgan Stanley’s investment banking revenues fell 5% YoY, driven by weak performance in advisory and fixed income underwriting. Advisory revenues declined 14% YoY due to fewer completed M&A transactions. In contrast, equity underwriting revenues rose 42% YoY, supported by increased activity in follow-ons, convertibles, and IPOs. Fixed income underwriting revenues dropped 21% YoY, reflecting a decrease in non-investment grade loan issuances. The M&A backlog continues to grow across regions, with a thematic emphasis on growth, particularly in healthcare and technology. With a similar focus on growth companies, the bank’s IPO pipeline remains balanced between the Americas and Asia, and issuers are prepared to launch, contingent on favorable market conditions.
Bank of America’s investment banking fees fell 9% YoY in Q2’25, led by a decline in M&A and leveraged finance fees. Despite the drop, the bank maintained its #3 position in investment banking fees year to date. It reported strength across debt capital markets fees, particularly in leveraged finance, as well as in equity capital markets. Given ongoing market volatility and concerns about potential economic shifts, the bank has adopted a conservative outlook for its investment banking business in FY’25.
Citi’s investment banking fees rose 13% YoY in Q2’25, driven by growth in advisory and ECM, partially offset by a decline in DCM. Advisory fees surged 52%, as the business gained market share across multiple sectors and with financial sponsors. ECM fees increased 25% YoY, supported by the strong performance of convertibles and IPOs as markets stabilized late in the quarter. DCM fees declined 12% YoY due to reduced investment-grade volumes, though continued share gains in leveraged finance helped offset the drop.
Deutsche Bank’s revenue from its origination and advisory (O&A) business fell 29% YoY in Q2’25, impacted by market uncertainty and the postponement of several material transactions to H2’25. The decline was led by a 43% drop in debt origination revenues, driven by a reduced fee pool and a more selective approach to new committed transactions. Equity origination revenues remained flat, while advisory revenues rose 2% YoY. Market uncertainty continues to affect the debt origination business, though conditions are expected to improve in H2’25. The advisory business aims to build on its strong first-half momentum and benefit from targeted hires made over the past two years. The equity origination business is expected to maintain a competitive product offering, with a particular focus on IPOs.
UBS’s advisory revenue declined 3% YoY in H1’25, mainly due to a drop in private fund activity. This was partially offset by an increase in M&A transaction revenue. Capital markets revenue fell 31% YoY, primarily because of lower recognition of purchase price allocation (PPA) adjustments on financial instruments and other related effects. Excluding these factors, core capital markets revenue decreased 19% YoY, driven by a slowdown in sponsor activity and markdowns that impacted positions in leveraged capital markets. In banking, the board remains confident in the M&A and LCM pipeline and UBS’s stronger presence in the Americas, both of which are expected to support YoY revenue growth in 2025. The bank also anticipates improved ECM productivity later in 2025 and into 2026, based on the current pipeline.
Barclays’ investment banking fee income declined 6% YoY in H1’25, mainly due to a 20% drop in ECM fees. This decrease was driven by a strong prior-year comparison, which included fees from a large UK rights issue in Q2’24. DCM fees fell 3% YoY, while advisory fee income dropped 7% YoY during the same period. Overall, the bank’s fee share remained steady at 3.4% in a broadly stable fee pool environment. In H1’25, Barclays achieved a return on tangible equity (RoTE) of 13.2%; it remains on track to meet its 2025 guidance and 2026 targets.
M&A advisory firms – H1’25 highlights
Similar to investment banks, major advisory firms saw a rebound in revenue in H1’25. While most firms recognize the heightened risks from ongoing geopolitical tensions, economic uncertainty, inflationary pressures, and volatile market conditions, they remain optimistic. Looking ahead to the rest of 2025, these firms expect better access to debt capital and an increase in deal-making activity. However, uncertainty surrounding tariffs remains a key risk.
Note: Houlihan Lokey’s fiscal year ends in March (represents numbers for the three months ending June 25).
M&A advisory firms’ performance and updates
Lazard’s financial advisory revenue rose 20% YoY in Q2’25, primarily driven by a higher number of completed M&A transactions valued above USD500 million. This year’s advisory revenue highlights the firm’s geographic and product diversity. The result reflects the strength of Lazard’s team and brand, including record revenue in France and Germany during H1’25. The firm has hired 14 managing directors for its financial advisory division so far in 2025 and remains on track to meet or exceed its 2030 goal of expanding its financial advisory team by 10 to 15 net additions annually.
Houlihan Lokey’s revenue rose 18% YoY in Q1’26, mainly due to an increase in feegenerating events, driven by stronger M&A activity and higher average transaction fees. Its financial and valuation advisory business is gaining momentum in line with the broader market recovery. Although macroeconomic uncertainties continue, the firm remains cautiously optimistic about 2026.
Moelis’ revenue grew 39% YoY in H1’25, driven by an increase in average fees earned per completed transaction, with notable strength in M&A and Capital Markets. During Q2, it onboarded three managing directors to its private capital advisory business. Additionally, it also onboarded one managing director to its technology and business services department in Europe.
PJT’s advisory revenue rose 7% YoY in H1’25, primarily due to growth in strategic advisory revenue. The company’s full-year outlook remains largely unchanged, with expectations for a significant increase in strategic advisory revenue in H2’25. PJT Partners anticipates strong growth in its strategic advisory division, with projections to surpass 2024 levels. Future guidance indicates a gradual improvement in M&A activity, supported by easing economic and regulatory uncertainties.
Evercore’s advisory fees increased by 23% YoY in Q2’25, reflecting higher revenue from large transactions and a greater number of advisory fees earned. Underwriting fees increased by 4% YoY in the same period, due to an increase in the average fee size of the transactions the firm participated in. The company anticipates continued growth in M&A activity and maintains a diversified revenue stream, with 50% of its revenues coming from non-M&A businesses.
PWP reported a 107% YoY increase in Q1’25 revenue, primarily driven by heightened M&A activity and increased demand for financing and capital solutions, supported by larger transactions and related fee-generating events across the business. Amid ongoing market volatility and a rapidly evolving geopolitical landscape, the firm continues to support clients in achieving their strategic and financial goals, while also investing in top talent across high-potential industry sectors to accelerate long-term growth for its shareholders.
The road ahead
Financial sponsors poised to reemerge as key drivers of M&A activity
Over the past three years, higher interest rates have raised borrowing costs and lowered corporate valuations, prompting financial sponsors to delay asset exits. This has resulted in a buildup of unsold assets, creating a backlog expected to drive a strong rebound in M&A activity in 2025. Private equity firms, facing increased pressure to return capital to investors, will be motivated to monetize existing assets before initiating new fundraising efforts. Additionally, the relatively lower valuations of publicly traded companies outside the US offer attractive opportunities for sponsors to strategically deploy excess capital.
Corporates set to accelerate capital deployment through M&A
Corporations worldwide are shifting from net sellers to net buyers, signaling renewed interest in strategic acquisitions. This trend is expected to gain momentum throughout 2025, supported by a more favorable macroeconomic and regulatory environment. As the US Federal Reserve's interest rate target is projected to decline to 3.75–4% by year-end, the opportunity cost of holding cash will increase. In response, corporations are likely to adjust their capital allocation strategies, prioritizing mergers and acquisitions over dividends and share buybacks. Additionally, a more accommodative antitrust and regulatory landscape under the new US administration is expected to further encourage strategic deal-making across a wide range of transaction sizes.
Valuation gaps and regional growth expected to fuel cross-border M&A
Over the past five years, the US economy has consistently outperformed those of Europe and the UK, prompting European companies to consider acquiring US firms to gain exposure to a more dynamic market. Conversely, US corporations are increasingly eyeing European targets to expand their international footprint and capitalize on comparatively lower valuations. Meanwhile, fast-growing economies in Asia continue to attract strong interest from private equity firms. As global M&A momentum builds, cross-regional dealmaking in Asia is expected to accelerate significantly, driven by both strategic expansion and the pursuit of high-growth opportunities.
Activist campaigns expected to remain elevated in 2025
With peak interest rates behind us and inflation largely under control, shareholder activism is set to gain momentum in 2025. Activist funds are raising larger capital pools and increasingly targeting bigger, more prominent companies. As geopolitical and market conditions become more favorable for mergers and acquisitions, activists are expected to intensify pressure on corporate boards, especially those seen as having missed strategic M&A opportunities. Companies that resolved activist challenges in 2024 but continue to underperform may face renewed scrutiny and a potential second wave of activism. A stronger M&A environment, with more active buyers, will likely encourage activist investors to push for structural changes at undervalued firms, particularly through corporate separations and spin-offs aimed at unlocking shareholder value.
Corporate simplification expected to drive M&A activity
The global shift towards corporate simplification is expected to remain a key driver of M&A activity in 2025. Companies are increasingly focused on unlocking value by identifying undervalued assets, separating noncore or misaligned business units, and refining their geographic focus. This trend will lead firms to streamline portfolios in line with long-term secular trends, reallocate capital to higher-return opportunities, and enhance strategic clarity. Regional separations are likely to become more common, allowing companies to better target specific investor bases and address operational inefficiencies tied to managing crossregional entities. Additionally, valuation differences across markets will continue to support M&A, as companies seek more favorable capital environments through changes in domicile, stock exchange listings, or corporate headquarters.
Industry-focused M&A activity set to persist
Following several years of heightened regulatory scrutiny, the outlook for bank M&As is improving. Regulatory agencies are expected to ease entry barriers for new market participants and adopt a more accommodating stance toward mergers that meet statutory requirements. Beyond banking, industries such as energy, technology, and healthcare, which have already experienced significant deal activity in recent years, are poised for continued momentum in 2025. This will be driven by strategic realignment, consolidation efforts, and the pursuit of operational efficiencies. Moreover, the anticipated wave of industry transformation fueled by artificial intelligence is catalyzing M&A across the technology sector, with companies of all sizes seeking to strengthen their capabilities and competitive positioning through targeted acquisitions.
Global M&A activity slows amid tariffs and market volatility
As the M&A market contends with a turbulent landscape shaped by sweeping tariffs and broader market volatility, dealmaking has slowed considerably. These new complexities are forcing both buyers and sellers to adopt more nuanced approaches to transaction structuring and risk allocation. At the same time, economic and political instability is making financial forecasting increasingly difficult, further dampening confidence in executing cross-border deals. As a result, global M&A activity has entered a period of hesitation, with many transactions delayed or restructured in response to the evolving trade environment.
