Global M&A recalibrates as trade tensions and AI shape 2025 deals
In the opening months of 2025, corporate buyers and private equity firms were poised for a rebound. Fifty-three percent expected their appetite for M&A to grow this year. Then came tariffs.
As trade tensions escalated, so did caution. A follow-up question included in Norton Rose Fulbright’s Global M&A Trends and Risks Report, in collaboration with Mergermarket, found that more than two-thirds of dealmakers have since reduced their M&A appetite as a direct response to geopolitical uncertainty.
Still, the dealmaking engine hasn’t stalled—it’s shifting gears.
Cross-border ambitions have pulled back in favor of domestic strategy. Executives now expect domestic strategic buyers to be the most active acquirers in 2025—especially in Latin America (74%), Africa (61%), and South and Southeast Asia (57%).
That regional pivot is also visible in private equity. Forty-four percent of survey participants expect domestic PE firms to lead on deal volume this year, with international players focused on East Asia, Europe, and Australasia.
“We’re seeing a clear shift in how clients approach M&A, with a move towards more deliberate and strategic planning,” said Raj Karia, Norton Rose Fulbright’s Global Head of Corporate, M&A and Securities.
If there’s one consistent area of optimism, it’s AI. More than half of respondents (51%) said they had already acquired an AI business—up from 33% last year. An additional 46% said they plan to do so in the near term.
Executives also report embedding AI into core M&A functions: from deal sourcing to due diligence and post-deal integration. Adoption is strongest in East Asia (82%), Africa (79%), and Southeast Asia (74%).
“Despite trade and tariff uncertainty, AI is a bright spot,” said Scarlet McNellie, US Co-Head of Corporate, M&A and Securities. “We expect this increased adoption of AI to continue, which will position dealmakers to act with greater speed and certainty.”
As capital market conditions tighten, private credit is gaining traction. Thirty-five percent of respondents expect it will become harder to secure M&A financing this year—and one-quarter believe private credit will be the single most important source of deal funding over the next two years.
That momentum is especially strong in Africa, the Middle East, and Southeast Asia, where traditional lenders have grown more risk averse.
Meanwhile, representations and warranties insurance (RWI) is fast becoming standard practice. Sixty-five percent of respondents expect RWI usage to increase in 2025, with 37% forecasting a significant jump—up from 26% in last year’s survey.
The trend is most pronounced in the Middle East and South and Southeast Asia, where more than 45% of respondents foresee substantial growth in deal insurance.
Increased antitrust scrutiny, regulatory uncertainty, and capital constraints are clearly impacting deal execution. But dealmakers are not standing still.
“In the current market environment, access to financing is paramount,” said Kessar Nashat, US Co-Head of Corporate, M&A and Securities. “We are seeing acquirers continue to adopt to new capital structures, often including both private equity and private debt to bring deals to fruition.”
As AI adoption accelerates and domestic capital steps in, the M&A playbook for 2025 is being rewritten—not abandoned. As Norton Rose Fulbright’s report shows, caution and ambition now coexist.