M & A in 2025: uncertainty, resilience and a path to recovery

Whilst my younger colleagues didn’t experience 2008, when the global financial crisis sounded the death knell for many transactions, we all remember the recent pandemic.

Today the world is grappling with conflict in the Middle East and Europe, as well as US tariffs and threats to global supply chains. So how does the current M & A world compare with those earlier events and what does 2025 hold in store?

One of my final deals of 2007 had been the private equity backed buy out of Astbury Marsden, a city recruiter who counted Lehman Brothers amongst its top clients. The business didn’t survive long and, for a year or so, there was no cash to do deals and M & A ground largely to a halt. The banking sector was hit hardest but most sectors and deals were affected.

So far, (at the time of writing) the market volatility in the aftermath of Trump’s tariffs has not claimed any major scalps, but it took several months for the severity of the 2008 global financial crisis to reveal itself.

In March 2020 we were poised to complete the sale of a local IT managed services provider, after many months of hard work.

As we entered lockdown, the buyer withdrew and for a period, like 2008, very few deals were done. It was shorter lived, however, than 2008, and during the year healthcare and technology valuations boomed and deals were certainly done.

The veterinary sector was one where we completed a good number of deals at very high multiples, as people rushed to buy their “lockdown puppies” and demand for vets soared. Some sectors were hit hard of course, and in the space of three months the UK’s FTSE all-share index did fall by 25 per cent.

The stockmarket rout triggered by Trump’s tariffs certainly ranks among the largest since the Great Depression nearly a century ago, but it was surpassed by both the 2008 global financial crisis and the initial Covid-19 panic in early 2020.

As with 2020, today some sectors and business are being hit harder than others. Deals have been put on hold, especially where there is exposure to the US markets.

Manufacturers, with their global supply chains, are being hit harder than many technology and service businesses. For some transactions, it is a case of “wait and see”. Both buyers and sellers might take time for the dust to settle.

The UK is arguably in a stronger position than many and hopes remain of a series of trade deals being agreed in the coming weeks. Meanwhile, interest rates are falling, which should encourage investment and funding, and the threat of further tax rises may encourage some vendors to transact now. History tells us that deals that have been put on ice will return. The UK remains an attractive home for inward investment and certainly in Cambridge innovation and entrepreneurship will continue to drive activity.

Let’s not just observe the changes in the M & A landscape – we can and should be proactive in shaping its future. Whether you’re considering a transaction, exploring new opportunities, or simply preparing for what’s ahead, it’s never too soon to act. The road ahead holds challenges, but also immense possibilities. Let’s navigate them together.

• Tom can be contacted via email - t.gallop@sw.oaklins.com or on +44 7771 560 255.