A&O Shearman Unveils Insights on Global M&A Trends for 2025

In its latest report, "M&A Insights for the First Half of 2025," A&O Shearman delves into the complexities of global mergers and acquisitions, offering timely analysis on critical trends and challenges facing the market. The report, published on July 9, 2025, brings together insights from partners across the firm's nearly 50 offices in 28 countries, highlighting the interplay between macroeconomic conditions, regulatory frameworks, and evolving political landscapes that shape transaction flows in major markets.

The examination of current market dynamics reveals that shifting trade policies are presenting significant obstacles to deal execution, particularly for large-scale transactions. According to David Broadley, Partner at A&O Shearman in London, "Navigating the current environment requires a nuanced understanding of how these policies can affect both buyers and sellers". The report underscores the importance of strategic foresight in a climate marked by uncertainty.

Key findings include a notable interest in preferred equity instruments, which are attracting investors seeking innovative capital deployment strategies. The analysis shows that private equity remains robust, particularly in mid-market take-privates and distressed acquisitions, while private credit is increasingly stepping in to provide financing support. Dirk Meeus, Partner in Brussels, noted, "The appetite for unique investment structures is indicative of a broader trend among investors to adapt to market challenges."

Furthermore, the life sciences sector is highlighted as a focal point for innovative deal structures, with companies and investors seeking to mitigate the rising costs and complexities associated with drug development. Scott Petepiece, a Partner in New York, states that "The intersection of innovation and finance in this sector is crucial as stakeholders pursue viable paths forward amidst escalating expenses."

The report also addresses how industrial companies are adapting to high energy costs, tariffs, and evolving antitrust policies. The U.S. Outbound Investment Security Program, introduced during the latter part of the Biden administration, is analyzed for its impact on transactions involving counterparties from "countries of concern," specifically China, Hong Kong, and Macau. This program's implications are particularly salient as it represents a shift in U.S. foreign investment strategy.

In Europe, defense-related M&A activity is on the rise, driven by increased military investment and efforts to streamline regulatory processes. The report indicates that investors are developing targeted strategies to meet the specific demands of this sector, as military expenditures grow in response to geopolitical tensions.

Additionally, the report notes an acceleration of take-private activity across Southeast Asia, driven by low liquidity and ongoing consolidation among regional real estate investment trusts. The implications of these changing dynamics compel dealmakers to reevaluate ownership thresholds and governance rights while complying with new international standards.

The analysis also sheds light on the challenges faced by basic industries in Europe, such as chemicals and steel, where high energy costs and renewed tariff barriers complicate merger enforcement. A&O Shearman's partners emphasize that understanding the merger control factors is critical to evaluating the feasibility of such transactions in this complex landscape.

In summary, A&O Shearman's "M&A Insights for the First Half of 2025" serves as an essential resource for professionals engaged in global dealmaking, providing concise, attorney-driven analysis that empowers stakeholders to understand and capitalize on emerging market developments. As the landscape continues to evolve, the insights presented in this report will be invaluable for navigating the complexities of mergers and acquisitions in a fast-paced global environment.