A new report from Bain & Company suggests that mergers and acquisition (M&A) activity will take off this year as two impediments — regulatory challenges and high interest rates — abate and what it refers to as the existing “intrinsic demand” for deals can be realized.
“While we saw a modest recovery last year, deal value remains historically low as a percentage of global GDP as headwinds have stifled dealmaking for the past three years,” Les Baird, a partner at the company and head of the firm’s global M&A and Divestitures Practice said in a press release about the report.
“Even throughout the slow period, the best companies have persisted, learning how to navigate unfavorable market realities to deliver inorganic growth. Now, as headwinds become less acute, more companies will join those that have learned how to adapt.”
The rebound Bain & Company anticipates continuing began last year. The report said that M&A deal value more than doubled in 2024, year over year, to reach about $127 billion. That was the first time the total exceeded $100 million since 2021.
The Americas accounted for 62% of the total; the top three deals last year were in the United States. They were between Verizon and Frontier ($20.3 billion), U.S. Windstream and Uniti ($13.4 billion), and Charter Communications-Liberty Broadband ($16.6 billion).
In their M&A report, Bain & Company characterized the past three years:
- Scale deals accounted for 58% of worldwide value last year. The report points out that this was a shift from the previous two years, though the top two U.S. deals accounted for more than half of the 2024 total.
- Infrastructure divestments accounted for 19% of deal value in 2024 and mobile and fixed divestments accounted for 16%.
- Infrastructure divestments accounted for a larger portion of M&A action from 2019 through 2022, though macroeconomic issues such as high interest rates reversed that trend.
- Scale deals accounted for about 39% of all deal value during the past five years. This was the largest share among deal types. Infrastructure divestments were the second-largest at 31%.
Telecompetitor compiled a report on 2024 M&A activity in December.
