Global M&A Activity Heats Up Despite Geopolitical Risks
Global mergers and acquisitions (M&A) activity is gaining momentum in 2025, driven by stabilizing interest rates, pent-up capital, and emerging sectoral opportunities. However, geopolitical risks, including trade policy uncertainty in the US, the ongoing conflict in Ukraine, and right-wing electoral gains in countries like Germany and France, are creating significant challenges for investors.
As economic and political volatility affects these regions, M&A players are reassessing the risks associated with cross-border mergers and acquisitions. Rowan Bamford, president of Liberty GTS, a leading M&A insurance provider, noted that cross-border deals inherently carry more risks than domestic transactions, potentially driving demand for warranty & indemnity (W&I) insurance.
“M&A activity during January and February was slower than expected in the US, but we don’t see this as a sign of a broader trend,” Bamford said. “We believe it’s just the market taking a moment to digest and recalibrate in light of potential policy shifts.” In contrast, Europe presents a different scenario, where cross-border activity is the norm and involves a more complex set of variables.
Investor Interest Shifts to UK and Asia Amid Uncertainty
Investor caution is particularly pronounced in North America, where political tensions have made global dealmakers cautious. Amid heated debates around tariffs, economic nationalism, and trade imbalances in the US, buyers are likely to adopt a wait-and-see approach. However, the situation is reversing, with American buyers now being more cautious about European targets as the continent faces its own political challenges.
In this context, the UK has emerged as a relatively attractive market, especially compared to continental Europe. With capital needing a home and uncertainty clouding other regions, London and its surroundings are becoming increasingly viable. “The UK is relatively stable. Interest rates have dropped and don’t appear likely to change significantly over the next 5–10 years,” Bamford observed. The attractiveness of UK real estate and efforts to make the UK a technological hub are additional draws for investors.
Attention is also turning toward Asia as investors seek a counterbalance to instability in the West. Investment capital has shifted from Southeast Asia to new hotspots like China and India. However, sector-specific investments remain active in Southeast Asia, ranging from oil and gas in Indonesia to food production in Thailand and the Philippines.
W&I Insurance Market Shows Signs of Correction
Against the backdrop of the global M&A landscape, the W&I insurance market is undergoing a correction. Rates have been falling in recent years, but Bamford believes pricing has bottomed out. The influx of new entrants in the MGA space has driven prices down aggressively, but this phase may be ending as reinsurance markets demand better returns and tighter underwriting.
“Many new entrants are struggling to get their capital renewed,” Bamford noted. “There’s a lot of pressure from capital providers on MGAs to deliver better returns per risk. I wouldn’t be surprised if 10–20% of MGAs exit the market because they’re no longer viable.”
