M&A Holds Opportunities Amid Global Uncertainty

M&A Holds Opportunities Amid Global Uncertainty
July 7, 2025 5 mins

M&A Holds Opportunities Amid Global Uncertainty

M&A Holds Opportunities Amid Global Uncertainty

Aon’s recent M&A panel discussion explored the drivers behind current and future mergers and acquisitions, in the context of global macroeconomic shifts. While uncertainty prevails, strategic opportunities exist for discerning investors.

Key Takeaways
  1. Macroeconomic uncertainty, particularly surrounding trade policies and fiscal deficits, will likely persist for 18-24 months, impacting growth trajectories.
  2. Despite challenges, the M&A market presents opportunities for well-prepared buyers who conduct thorough due diligence and seek downside protection.
  3. The integration of AI into business strategies is crucial for future competitiveness, as companies that fail to adopt AI risk falling behind.

The M&A panel, organized by Aon’s M&A and Transaction Solutions team, brought together industry leaders to discuss current trends and challenges in the M&A sector. The panel explored the interplay between macroeconomic factors and M&A activity, highlighting the importance of strategic decision-making in an era marked by geopolitical tensions and economic shifts.

Top 5 Panel Insights

  1. Strategic Diversification Amid Trade Uncertainty: The unpredictability of global trade policies, particularly US tariff adjustments, necessitates proactive diversification of export markets. With key dates looming, such as the August 12 tariff reversion, businesses are strategically rerouting their supply chains. Southeast Asian ports, especially in Vietnam and the Philippines, are seeing increased activity as companies seek to mitigate trade risks. This environment presents growth opportunities for countries like the UAE, which are poised to benefit from this shift.
  2. Navigating Fiscal Challenges and Economic Stress: The potential unwinding of Biden-era policies, combined with new fiscal measures, could elevate the US fiscal deficit beyond 8 percent of GDP. This scenario may result in increased borrowing costs and financial stress, impacting investor confidence and M&A valuations. Companies must strategically navigate these economic shifts, particularly in light of potential currency fluctuations between the Euro and the US dollar, which could complicate cross-border transactions. Understanding the global implications of economic policies is crucial for businesses aiming to stay ahead of the curve.
  3. Adapting to Valuation Fluctuations in M&A: Despite a strong start in early 2025, with M&A activity reaching $189 billion, April saw a notable 22 percent decline in deal volume and a 24 percent drop in valuations. Buyers are responding by increasing due diligence, seeking downside protection and using mechanisms like earn-outs to bridge valuation differences. There’s a strong focus on scrutinizing business plans and long-term investments and buyers are increasingly selective, focusing on industries that are less affected by geopolitical uncertainties, such as healthcare and financial services. On the seller side, companies experiencing a 20 percent drop in share price over the past year are 60 percent more likely to transact, facing pressure to monetize investments. Activity varies by sector, with A-grade assets trading swiftly and B and C-grade assets lagging.
  4. Evolving Private Equity Landscape: In Europe, private equity firms are sitting on record levels of cash with prolonged holding periods for portfolio companies now averaging over six years. Despite investing more than exiting over the past eight years, persistent valuation gaps still pose challenges. Limited partners are pressuring firms for monetization, favoring realized returns of continuation funds. Currently private equity activity is selective, focusing on resilient sectors like healthcare and financial services. Strategic portfolio rotation and exploring valuation dislocations, such as peer-to-peer investments, offer potential avenues for growth in this complex environment.
  5. Embracing AI for Competitive Advantage: A recent survey indicates 98 percent of companies are investing in AI to drive productivity gains and maintain competitive advantage. While the US leads in AI advancements, Europe faces regulatory and adaptability challenges. Energy availability is crucial for AI adoption, emphasizing the need for sustainable energy solutions. Companies that fail to integrate AI risk falling behind in the global market, highlighting the strategic imperative of embracing technological advancements. The intersection of energy security and AI integration is particularly pertinent, as regions like the Middle East invest heavily in infrastructure to support technological growth.

Future M&A Predictions

Waiting out the turbulent times is not advisable when it comes to M&A and plenty of opportunity exists for investors who get their due diligence right. 

The panel noted that short-term change and uncertainty often encourage reflection. Whether interest rates or valuations are high or low, businesses eventually acclimatise, it just takes time to adjust.

Ultimately, M&A has always been a tool for growth – a method to capture synergies to enter new markets. Diversification of supply chains is important, and companies will continue to take advantage of M&A to help them differentiate their offering. It's typically easier to acquire a business than build new supply chains; therefore, M&A demand will likely increase over the next couple of years. Amid uncertainty, maintaining a long-term M&A strategy coupled with due diligence is essential for unlocking and maximising future opportunities. 

Thanks to our panelists: 

Ana Boata
Head of Economic Research at Allianz Trade 

Stephen Trauber
Chairman and Global Head of Energy and Clean Technology at Moelis & Company, Member of Aon’s M&A Advisory Board 

Pamela Hendrickson
Vice Chairman at The Riverside Company and Chairman of the Board of the American Investment Council, Member of Aon’s M&A Advisory Board 

Philippe Moore
Vice President M&A at Thales Group 

Anne Bizien
Managing Director, Co-Head of M&A at Goldman Sachs 

Engage with Aon’s M&A and Transaction Solutions team to explore strategic opportunities in today’s dynamic market. With expert guidance and comprehensive analysis, Aon can help your organization identify growth prospects and mitigate risks in the evolving M&A landscape. By partnering with Aon, businesses can leverage expert insights to navigate uncertainties and capitalize on emerging opportunities, ensuring sustained growth and success.

NB: Any statistics in this article were taken directly from the event

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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