Breaking Down JP Morgan's 2025 Global M&A Mid-Year Outlook Report

In this solo episode of the DealQuest Podcast, I wanted to dig into JP Morgan's 2025 Global M&A Mid-Year Outlook Report, titled "Navigating Uncertainty." Having spent 35+ years in deal-making, I find these global market analyses fascinating because they reveal patterns that often trickle down to smaller deal markets and cross-border transactions that impact businesses of all sizes.

The report captures what many of us have been experiencing firsthand: markets that began 2025 with optimism but quickly encountered the reality of trade and geopolitical uncertainty. Whether you're doing domestic deals, international transactions, or simply operating in supply chains affected by global M&A activity, these trends matter. What struck me most about JP Morgan's analysis is how uncertainty continues to drive deal patterns, even as markets show remarkable resilience.

Optimism Tempered by Reality

The year started with genuine excitement in global markets. There was anticipation of surging M&A activity, a pro-business operating environment, declining inflation, and the promise of lower interest rates. This optimism created real momentum in early deal conversations.

But as I've discussed many times on this podcast, the worst thing for any deal market is uncertainty. It's worse than having certainty about something you don't like. If you know there's going to be a 30% tariff, at least you can plan around that. When you don't know if it'll be 15% or 50%, that uncertainty freezes decision-making.

JP Morgan's report confirms this pattern played out globally, with trade and geopolitical uncertainty quickly tempering that initial optimism.

The Numbers Tell a Compelling Story

Despite the uncertainty, global M&A volumes hit $2.2 trillion, up 27% year over year. That's a significant jump, even accounting for the lower activity levels of recent years due to higher interest rates and inflation.

The breakdown by quarters reveals something interesting about deal momentum. The first quarter started sluggish but ended strong, with March accounting for 50% of first quarter volume. The second quarter initially slowed due to what they called "Liberation Day tariffs" hampering April volumes, but then rebounded as trade policies began taking shape.

This pattern reinforces something I've observed: once there's more clarity around policy, even if people don't love the policy, deal activity picks up because businesses can at least plan around known parameters.

Mega Deals Drive Market Growth

One of the most striking findings was the 57% increase in mega deals, with 72% of volumes consisting of deals greater than $1 billion. This represents a 20-year high, not just an increase over recent years.

This shift toward larger transactions makes sense in uncertain times. Bigger players have more resources to conduct thorough analysis, mitigate risks, and weather uncertainty. They also have the capital structure and balance sheets to take calculated risks when smaller players might hold back.

The focus on size and capital structure conservatism, as JP Morgan notes, reflects investors ascribing a premium for stability and financial strength in volatile times.

Sector Performance Reveals Strategic Priorities

Technology led the pack with 42% growth year-over-year, driven significantly by AI investments. Financial institutions grew 56%, diversified industries 41%, consumer and retail 32%, and media and communications 51%.

The media surge particularly caught my attention. In a landscape where traditional media faces increasing challenges, consolidation becomes a survival strategy. It's not surprising to see companies looking to achieve scale and operational efficiencies through M&A.

The slower growth in real estate (3%) and declines in healthcare (down 3%) and energy (down 9%) reflect sector-specific challenges and regulatory environments that may be constraining deal activity.

Cross-Border Activity Defies Expectations

Despite regulatory complexity and rising protectionism, cross-border activity not only persisted but grew 24% year-over-year, with a 92% increase in Asia-Pacific activity specifically.

This might seem counterintuitive, but it reflects strategic thinking by businesses. If tariffs are going to be higher in one jurisdiction, acquiring a company in another market with more favorable trade relationships becomes attractive. It's defensive positioning disguised as growth strategy.

The report's note about excluding Chinese government capital injections from strategic minority stakes is particularly telling, showing how geopolitical considerations increasingly influence deal structures and reporting.

Regional Opportunities Emerge from Instability

JP Morgan identifies specific regional opportunities that reflect broader economic and political dynamics. Political instability in Europe, particularly in France and Germany, may create opportunities in industrials, automotive, and consumer retail sectors.

Australia's position in global natural resources consolidation offers steady deal flow in energy and commodities. These regional nuances matter because they represent arbitrage opportunities for strategic buyers who understand local market conditions.

The LATAM region's description as having "strong fundamentals and attractive valuations overcoming economic and political noise" suggests opportunities for those willing to look beyond headline risks to underlying business fundamentals.

AI's Trillion-Dollar Infrastructure Demand

The AI section of the report includes staggering numbers: tech companies planning $1 trillion in spending over the next five years, with data center capacity needing to increase 100-fold over the next decade.

This isn't just about technology deals. It's about infrastructure, real estate, energy, and the ripple effects across supply chains. Where these data centers get built and who supplies them represents massive economic shifts that will drive deal activity across multiple sectors.

For businesses in related industries, this represents both opportunity and potential disruption that requires strategic thinking about positioning and partnerships.

Uncertainty as a Permanent Feature

Perhaps the most important takeaway from JP Morgan's analysis is their conclusion that uncertainty is here to stay. They identify ongoing sources of uncertainty including trade policies, macroeconomic shifts, geopolitics, currency fluctuations, and recession fears.

Yet they also note that markets have been "unbelievably resilient" and expect this resilience to continue. This creates an interesting dynamic for deal-makers: learning to operate effectively in permanently uncertain conditions rather than waiting for clarity that may never come.

The key is developing frameworks for decision-making that account for uncertainty rather than trying to eliminate it.

Strategic Implications for Deal-Makers

This report reinforces several principles I've observed in deal-making across different market cycles. First, uncertainty affects timing more than fundamentals. Good deals get done even in uncertain times, but the process may take longer and require more careful structuring.

Second, size and financial strength create options. Whether it's access to capital, ability to conduct thorough due diligence, or capacity to weather integration challenges, stronger balance sheets provide competitive advantages in volatile markets.

Third, cross-border thinking becomes more important, not less, during periods of trade tension. Smart strategic planning often involves positioning for multiple scenarios rather than betting on one outcome.

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Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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