US Deals 2025 Midyear Outlook

Potential deal activity is still percolating. Asked about their status on pursuing new M&A, 51% of respondents in PwC’s May 2025 Pulse Survey say they have initial steps underway (31%) or are beyond initial steps (20%). The administration’s policy shifts are likely short-term obstacles. Over the long haul, they may contribute to existing economic, technological and geopolitical trends pushing businesses toward transformation. The question is exactly how long it will take to reach a policy equilibrium in which C-suite leaders are comfortable deploying capital on major new investments.

During the lull, dealmakers can prepare for a dynamic operating environment as they evaluate their M&A strategy and execution. Running scenario analysis and having value creation roadmaps under the potential scenarios will be of critical importance to driving value through M&A. The critical question facing dealmakers right now is whether they try to wait out the administration’s current policies. The current volatility will create opportunities for strategic and financial buyers who can move quickly and decisively.

Divestiture activity, for instance, is likely to pick up as activist investors often begin circling during uncertain economic times. In 2024, activist activity by hedge funds and investment managers was 16% higher than the 5-year average (2019–2023) and 44% higher than the 10-year average (2014–2023), according to S&P Global Market Intelligence. This suggests a notable uptick in activity. Corporates that actively manage their liquidity may have a chance to land a key asset from a competitor. We’re seeing PEs conducting preliminary due diligence on many corporate divestitures but they remain mostly bearish on valuations.

Companies need to be able to identify sources of uncertainty and the various outcomes they might produce. There’s a significant opportunity for dealmakers who understand the impacts that changes have on elements including costs, margins and pricing power. Scenario planning around sources of uncertainty needs to be conducted more frequently — such as once a month or even more frequently instead of once a quarter or annually. Agile companies know what they want to buy or sell in multiple scenarios and are ready to act.