Global firm Norton Rose Fulbright and Mergermarket have released the third edition of their "Global M&A trends and risks report," which revealed that reciprocal tariffs issues have weakened the appetite for mergers and acquisitions.
Over two-thirds of respondents claimed that rising trade tensions had dampened M&A demand - even though as of the first quarter of 2025, 53 percent of respondents had reported an expected boost in this demand within their organizations.
"We're seeing a clear shift in how clients approach M&A, with a move towards more deliberate and strategic planning. This year's report captures that evolution, with trade tensions, financing pressures and regulatory scrutiny all influencing how deals are structured and executed," said Raj Karia, Norton Rose Fulbright's global head of corporate, M&A and securities, in a statement.
Key report findings
Deal insurance demand is expected to increase, with almost 65 percent anticipating an uptick in the use of representations and warranties insurance compared to 2024. Among these respondents, 37 percent expect a significant increase; in particular, over 45 percent of respondents from the Middle East and South and Southeast Asia anticipate this boost.
Fifty-one percent of respondents have acquired artificial intelligence businesses and used them in M&A processes like deal sourcing and due diligence. Forty-six percent indicated they planned to acquire an AI business in the near future.
Domestic strategic buyers are expected to become 2025's most active buyers, especially in emerging markets like Latin America (74 percent), Africa (61 percent), and South and Southeast Asia (57 percent). A quarter of respondents believe that private credit will be a critical financing form for M&A in the next two years; 35 percent anticipate that obtaining M&A funding will be harder this year compared to 2024.
Private equity buyers are also expected by 44 percent of respondents to be active acquirers in the deal market, with a particular impact in South and Southeast Asia (49 percent). The activity of global PE peers is anticipated to tick up in East Asia (41 percent), Europe (41 percent) and Australia and New Zealand (43 percent).
The "Global M&A trends and risks report" collated feedback from 200 executives which were obtained in the first and second quarters of 2025.