Global M&A Activity Set to Continue Growth in 2025
The global mergers and acquisitions (M&A) market is poised for continued growth in 2025 as dealmakers adapt to changing capital dynamics, according to the latest report from specialist broker BMS.
The fifth edition of BMS’s annual “Private Equity, M&A, Secondaries and Tax” report draws on comprehensive industry insights to assess the role of insurance in M&A transactions. It reflects on the market’s recovery in 2024 and provides a forward-looking perspective on the opportunities and challenges expected in 2025.
Despite macroeconomic pressures in 2024, M&A activity accelerated, driven by declining inflation, improved valuations, and reduced interest rates. BMS forecasts that this positive momentum will carry into 2025 as confidence strengthens further.
Sectoral Shifts in M&A Activity
Infrastructure led sector activity in 2024, but the report highlights growing interest in retail, healthcare, and business services for the coming year. Roll-up strategies are expected to drive deals in legal and accounting services, while emerging markets such as Latin America, Iberia, Italy, and India are gaining traction in the insurance-backed M&A landscape.
Secondary transactions reached a record $160 billion in 2024, surpassing the previous high of $134 billion in 2021. BMS attributes this increase to strong buy-side fundraising, rising interest in private wealth vehicles, and a more competitive cost of capital. The trend is expected to persist into 2025, particularly as sellers seek liquidity to strengthen their balance sheets.
Insurance Trends in M&A
Falling premiums and retention rates in 2024 enabled buyers to raise policy limits and seek broader protection. In the UK and EU, average rates on line (RoLs) declined 0.16%, with similar drops observed in the US, Asia, and MENA regions. Meanwhile, policy limits rose across all regions as a percentage of enterprise value, with the US seeing the largest increase at 5.48% over 2023.
A significant 40% rise in non-US tax liability insurance submissions in 2024 marked increased demand despite subdued M&A volumes in some sectors. While rates remained low last year, BMS anticipates increases of 20% to 30% in 2025 due to broader insurer appetite and complex regulatory changes, particularly in the UK and Abu Dhabi.
Evolving Deal Structures
BMS managing director Tan Pawar noted that “deal structures will continue to develop in innovative and complex ways,” with insurance evolving to match. He emphasized that transactional insurance now supports not only risk mitigation but also capital optimization. BMS expects 2025 to bring further market maturity and global diversification, with insurance solutions playing a central role in unlocking deal flow.
