Why 2025 will be a year of increased M&A and Reorganisation Activity
As I noted in my recent LinkedIn post, 2025 will be the year companies move beyond dealmaking and into the hard work of reinvention which will drive the need for more corporate transformations and reorganisations.
Mergers and acquisitions are no longer just transactions - they’re catalysts for operational overhauls, portfolio optimisation, and strategic pivots. Here’s what I think you need to know to stay ahead.
The Forces Reshaping M&A
1. Private Equity’s Liquidity Imperative
With $3 trillion in dry powder and aging portfolios, private equity firms are under intense pressure to exit investments. This means aggressive reorganisation of portfolio companies—cost-cutting, spin-offs, and bolt-on acquisitions - to maximise valuations before sale. The take-private trend, which surged to $200 billion in 2024, will accelerate as firms overhaul operations away from public market scrutiny.
Key Insight: Buyers are prioritising targets with clear post-merger transformation/integration plans.
2. AI’s Dual Role: Deal Accelerator and Execution Partner
AI is revolutionising M&A, from predictive analytics in due diligence to post-close automation of redundant workflows. Companies using AI to model synergies and integration risks are outperforming peers. For example, Thomson Reuters leveraged AI to integrate legal tech acquisitions seamlessly - a strategy now critical in sectors like healthcare and fintech.
Key Insight: Ignoring AI in integration planning risks leaving value on the table.
3. The Rise of Strategic Carve-Outs
Activists and boards are pushing companies to shed non-core assets. Spin-offs and divestitures accounted for 22% of 2024’s deal value, a trend set to grow in fragmented sectors like industrials and healthcare. Johnson & Johnson’s split into focused pharmaceutical and consumer health entities exemplifies this shift toward leaner, more agile organisations.
Sectors Leading the Charge
Energy: Balancing Legacy and Transition
Traditional energy firms are using M&A to fund green transitions. ExxonMobil’s $60 billion acquisition of Pioneer Natural Resources underscores this dual focus: securing near-term cash flow while investing in carbon capture and hydrogen ventures. Expect a surge in divestments of coal and oil assets to fund these bets.
Healthcare: Acquiring Innovation, Restructuring Legacy
Pharma giants are acquiring AI-driven biotechs to accelerate drug discovery, but integrating these startups demands dismantling outdated R&D models. The $43 billion Pfizer-Seagen deal highlights the risks and rewards of betting on targeted innovation.
Cross-Border Deals: Navigating New Complexity
U.S.-Europe arbitrage opportunities are driving tech and energy deals, but geopolitical tensions and evolving regulations (like 2025’s “Reverse CFIUS” rules) require meticulous risk assessments. Japanese firms, for instance, are targeting U.S. infrastructure assets to diversify supply chains.
Four Strategies for Success
1. Operational Readiness and Value Creation
Successful transformation requires careful preparation. Organisations that thrive in this environment focus on:
Streamlining legal entity structures to facilitate quicker due diligence and enable smoother post-merger integration
Optimising cross-border operations for efficiency and compliance
Strengthening internal controls and reporting systems
Developing clear integration plans that identify opportunities for systems consolidation
Building robust governance frameworks
Maintaining clear visibility of operational dependencies
2. Pre-Close Integration Planning
Start aligning teams, systems, and cultures during due diligence. Use AI to simulate integration roadblocks - like IT incompatibilities or cultural clashes - and address them before Day One.
3. Leverage Hybrid Financing Models
With interest rates still elevated, private credit and NAV loans are replacing traditional debt. Mid-market firms, in particular, are using asset-based financing to fund restructuring without diluting equity.
4. Retain Talent Through Transparent Communication
Post-merger talent flight remains a top risk. Retention bonuses and clear career paths are essential, especially in tech and healthcare. If layoffs are unavoidable, execute decisively to minimise uncertainty.
Turn Ambition into Action
2025’s M&A landscape demands more than bold deals - it requires relentless execution. Whether you’re restructuring legacy operations, integrating AI, or navigating regulatory hurdles, success hinges on marrying vision with operational discipline.
If you're planning or implementing an M&A project or a corporate reorganisation, we'd be happy to discuss approaches that have proved successful for similar projects. Get in touch or explore our services and see how we can make your next project a success.
ABOUT THE AUTHOR
Keith is the legal Structuring and Governance lead at Complete Projects. He is a UK qualified corporate and restructuring lawyer and a governance specialist with over 20 years of international experience. He has successfully delivered projects across various sectors, with a particular focus on international energy. Prior to joining Complete Projects, Keith was a leader in PwC's international legal restructuring and governance team and led the Energy legal team in the UK.