M&A market set for moderate growth despite uncertainty, finds MHA and Baker Tilly report

UK merger and acquisition activity is likely to increase in 2025 driven by stabilising economic conditions, technological innovation and a “heightened corporate appetite for strategic growth”.

That’s one of the key findings in a new report from Lancashire-based accountancy and business advisory firm MHA in partnership with other member firms in the Baker Tilly International network.

Despite ongoing geopolitical uncertainties, MHA’s 2025 Global Transaction Report gives an outlook of “cautious optimism” for an increase in dealmaking activity thanks to a reduction in interest rates across key markets and a gradual improvement in investor confidence.

Around 67 per cent of Baker Tilly’s global corporate finance experts predict the level of M&A activity globally to increase moderately in the next 12-months with around 16 per cent expecting a significant increase.

The UK market, while facing economic headwinds, is expected to see increased M&A activity in 2025, particularly in resilient sectors such as technology and professional services. 

The report highlights that despite ongoing inflationary pressures and regulatory uncertainties, deal volumes are projected to rise as businesses seek strategic growth opportunities and private equity firms remain active in the mid-market segment.

Andrew Feeke, head of corporate finance at MHA, the UK and Ireland member firm of Baker Tilly International, said: “The global transactions market last year was defined by ongoing uncertainty. Geopolitical unrest and sluggish economic growth weighed heavily on M&A activity levels. However, a reduction in interest rates across many markets as a result of lower inflation offered a much-needed boost in the second half of 2024.

“Technology is increasingly driving the M&A process, with advanced analytics, AI, and data visualisation tools transforming due diligence. Sustainability continues to be a significant factor, with companies that align with global ESG trends commanding premium valuations. 

“We also see renewed interest in buy-and-build strategies, particularly in fragmented industries where consolidation can unlock synergies and market share gains. The outlook for 2025 is filled with opportunities, but success will require a proactive and innovative approach.”

Despite challenges such as geopolitical unrest in regions like the Middle East and Ukraine, and stagnant European economies, the report notes that the US market is expected to experience a short to medium-term boost in M&A activity, potentially influencing other major economies like the UK. 

The ongoing demand for digital transformation, innovation, and automation across industries is driving companies to acquire cutting-edge technologies and intellectual property to remain competitive.

For a detailed examination of global transactional activity and forecasts for 2025, the read the full 2025 MHA Global Transaction Report on the MHA website.