The aggressive attempt by Paramount Skydance Corp. to steal Warner Bros. Discovery Inc. from Netflix Inc. perfectly captures the themes that have shaped a successful year for mergers and acquisitions: the flow of money from the Middle East, Wall Street's large checks, the renewed desire for transformative partnerships, and US President Donald Trump's dual roles as dealmaker and disruptor.
According to figures collated by Bloomberg, global transaction values have increased by around 40% to over $4.5 trillion this year as businesses pursue extremely ambitious combinations, encouraged by more accommodating regulators. It features the largest collection of agreements of $30 billion or more, making it the second-highest total ever.
According to Ben Wallace, co-head of Americas M&A at Goldman Sachs Group Inc., "there is a sentiment in boardrooms and among CEOs that this is a potential multi-year window where it's possible to dream big." "There is hope that there will be more liquidity because we are at the start of a cycle of rate reductions."
In addition to Netflix's acquisition of Warner Bros., this year's blockbusters include the record leveraged buyout of video game manufacturer Electronic Arts Inc., Union Pacific Corp.'s acquisition of rival railroad operator Norfolk Southern Corp. for over $80 billion, including debt, and Anglo American Plc's acquisition of Teck Resources Ltd. to transform the global mining industry.
"You don't want to be left out when you look around and see your peers doing these big deals and taking advantage of the tailwinds," stated Maggie Flores, a partner at the New York law firm Kirkland & Ellis LLP. "People are taking advantage of the regulatory environment, which is in a very conducive position to dealmaking."
The total also reveals a degree of enthusiasm in some areas that some analysts and advisers fear is unsustainable. Market watchers are increasingly cautioning of a selloff in the scorching equities markets that have supported the M&A comeback as global trade tensions continue.
Concerns about an overheated artificial intelligence environment, where massive investment has fueled technology stocks, have led top executives at Goldman Sachs, JPMorgan Chase & Co., and Morgan Stanley to warn of the possibility of a correction in the coming months.
Charlie Dupree, global chair of investment banking at JPMorgan, stated that "these equity returns are really coming from AI, and AI spend is not sustainable." "You are going to see a broader market that isn't really advancing if that pulls back."
Some of the most notable transactions of the year resulted from the AI hype. SoftBank Group Corp., Nvidia Corp., and Walt Disney Co. all made significant investments in Sam Altman's OpenAI, and a group headed by Global Infrastructure Partners of BlackRock Inc. decided to pay $40 billion for Aligned Data Centers. Alphabet Inc., the parent company of Google, presented its $32 billion acquisition of cybersecurity startup Wiz Inc. in March as a means of offering consumers additional protections in the AI future.
According to Wally Cheng, head of global technology M&A at Morgan Stanley, "everyone needs to be an AI banker now." "AI is consuming software, just as software started consuming the world fifteen years ago."
Due to a number of high-profile acquisitions in both public and private markets, the technology industry as a whole has already recorded a record year for transactions.
The trend also reached the White House during the summer, when the US government made an unusual acquisition of almost 10% of Intel Corp. with the goal of reviving the business and increasing domestic chip production.
It was one of the most obvious examples of Trump's readiness to blur the boundaries between government and business and get involved in mergers and acquisitions during his second term, especially in industries that were thought to be mission-critical.
Additionally, his administration purchased a portion of MP Materials Corp., a manufacturer of rare earth elements, and Commerce Secretary Howard Lutnick has alluded to such transactions in the defense industry.
Separately, Trump has been presenting himself as a kingmaker in high-profile deals. In order to approve Japan's Nippon Steel Corp.'s takeover of United States Steel Corp., the government obtained a "golden share" in the company.
The president recently indicated that he would veto any acquisition of Warner Bros. that did not include new ownership of CNN.
According to Boston College Law School professor Brian Quinn, "the Trump administration's approach to merger regulation today is markedly different compared to the first time around."
According to Quinn, he couldn't think of a Republican from fifteen to twenty years ago who would today say that the US government "is involved in the business of picking winners."
Bankers will undoubtedly question whether they could have accomplished more in 2025 if it weren't for the turbulent time earlier in the year when transactions were halted due to Trump's trade war impeding markets.
Additionally, the number of acquisitions being announced internationally is stagnant, indicating that ongoing economic difficulties are still having an impact on some aspects of M&A.
According to Jake Henry, global co-leader of the M&A team at consultancy McKinsey & Co., many small and mid-cap firms have trailed behind the larger stock market and are choosing to pursue their own strategic goals rather than considering inorganic choices.
"They're thinking, 'I'm better off just running my business and getting there.'" For them to come to the table, it must be a compelling proposition, he stated.
In the meantime, value differences with purchasers continue to make it more difficult for private equity companies, whose purchases and sales serve as a crucial indicator for M&A, to offload some assets.
Their capacity to raise money and make fresh acquisitions has been negatively impacted by this. However, as borrowing rates decline and more potential buyers show up, bankers are beginning to see a comeback here as well.
"The need to return money to investors is what's driving sponsors more than anything," stated Saba Nazar, chair of global financial sponsors at Bank of America Corp. "For the past few months, we have been in a bake-off frenzy."
