Simon Wood

A lot has already happened in 2025… we take a look at this year's M&A surprises. Welcome back to Mergerspresso… I'm Simon Wood.

Lucy Robson

And I'm Lucy Robson. Mergerspresso is AG's corporate finance soundbite. All you need to know on one subject, in the time it takes to make your coffee. [Pause] Shall we start with the headline surprise, then? The M&A boom that wasn't…

Simon Wood

Never reopen new year predictions! At the start of the year, all the money was on a deal boom originating from the US and then cascading through Europe with animal spits. Logic was that a stable pro-business political environment in the US would drive transatlantic M&A with deregulation encouraging larger and braver deals.

Lucy Robson

And what we're actually seeing is the greatest uncertainty in some time.

Simon Wood

Average deal size is significantly down on 2024 (~£900m v £300m). There's still strong interest in deals, but uncertainty about tariffs, interest rates and market swings is weighing on decisions and slowing the pace. There are signs of some deals that could gain traction over the summer, but it's hard to see stability returning anytime soon.

Lucy Robson

True, and it's clearly going to take some time for companies to unpack and then guide on what it means for them. [Pause] For me, there's a surprise around some of the European IPO candidates being talked about. The IPO market is still incredibly challenged, but there are some really big names which are said to be looking at IPOs. You've got Shein, Ben & Jerry's, Ebury, De Beers, Monzo, Waterstones…

Simon Wood

A lot of those in the consumer sector, but some solid household names in there.

Lucy Robson

Definitely. Even a couple of those would be incredibly helpful in resetting the narrative for IPOs in the UK It's not going to be a magic cure, but a couple of good news stories are sorely needed to remind everyone that it's a viable exit route. Plus, the LSE are very much campaigning for positivity at the moment.

Simon Wood

The other surprise has been the major resurgence of activist campaigns in the US and in Europe. There have been incredibly high profile campaigns … and a lot pushing for divestment breakups alongside really major strategic change. With valuations yo-yo'ing, and tariffs raising some existential questions about supply chains and geographic footprints, we can expect a lot more scope for activism over the coming months.

Lucy Robson

Well… we do indeed live in interesting times. So, what are 2025's biggest surprises for you? Get in touch if you'd like to chat, and catch you next time to hear about stepping up to the Main Market.