Regulatory – Antitrust and Competition

United States

Under the second Trump administration, U.S. antitrust enforcement is expected to return to a more traditional, economics-grounded approach, albeit with an increased emphasis on issues aligned with the administration’s political priorities. In contrast to the Biden-era focus on novel theories of harm, merger review in 2025 is likely to center on established principles of consumer harm and conventional economic analysis.

While leadership at the Department of Justice (DOJ) and the Federal Trade Commission (FTC) has expressed support for continuing to enforce the 2023 Merger Guidelines, the regulators are expected to apply those Guidelines with less expansive interpretations than seen in 2024. Enforcement agencies also are anticipated to be more receptive to structural remedies such as divestiture-based resolutions, and possibly even behavioral remedies, which may pave the way for an increased number of negotiated settlements. Additionally, the FTC may revisit and potentially rescind its prior approval policy, which currently requires merging parties to obtain advance clearance before pursuing future deals in related markets.

However, the regulatory landscape remains complex. In late 2024, the FTC introduced significant changes to the Hart-Scott-Rodino Antitrust Improvements Act premerger notification process, requiring the submission of additional ordinary-course documents, along with detailed disclosures on overlapping products, supply relationships, and the strategic rationale for transactions. These expanded requirements are expected to add complexity and lengthen the timeline for regulatory review, potentially slowing deal execution and increasing the burden on merging parties in 2025.

EU

Under the new leadership of Spanish Commissioner Teresa Ribera, the European Commission announced a focus on “resilience, efficiency, and innovation.” This policy shift includes heightened scrutiny of foreign subsidies, a push to accelerate the transition to renewable energy while maintaining affordable energy prices, and a sharper lens on so-called “killer acquisitions” by foreign buyers targeting EU assets.

Following the European Court of Justice’s ruling that curtailed the Commission’s ability to use Article 22 referrals to review transactions falling below EU or national merger control thresholds, the Commission is now exploring alternative approaches. EU Member States are increasingly encouraged to adopt measures such as transaction value thresholds and “call-in” powers for strategically significant transactions, even if they fall outside traditional criteria for notification.

The EU Foreign Subsidies Regulation has also emerged as broader in scope than originally anticipated, now capturing a growing number of transactions. Companies continue to face challenges in gathering foreign subsidy information globally, making early preparation essential for dealmakers in 2025, particularly if state-owned or controlled entities are part of a transaction.

While heightened regulatory scrutiny adds uncertainty, it also creates opportunities. Deals that align with national or regional policy goals – such as strengthening European industrial resilience, energy security, or technological leadership – may find a smoother regulatory path.

United Kingdom

The UK’s Competition and Markets Authority (CMA) has gained expanded power under the Digital Markets, Competition and Consumers Act 2024 (DMCC), which could significantly impact review of deals in the technology, digital markets, and AI sectors. Notably, the CMA can now scrutinize “killer acquisitions” even in the absence of overlapping activities between the target and acquirer. If one party – even just the acquirer – has at least a 33% share of supply and UK revenues of £350 million, this is a sufficient basis to establish CMA jurisdiction.

Although the UK’s merger control regime remains largely voluntary, companies designated as having Strategic Market Status (SMS) are now subject to mandatory reporting of certain transactions. This new requirement is enforced by the new Digital Markets Unit (DMU), a specialized body within the CMA.

These expanded enforcement tools arrive as the CMA reaches a possible inflection point. The newly elected Labour Government faces mounting political pressure to cut red tape and promote economic growth. The appointment of the former head of Amazon UK as CMA Chair in January 2025 has already sent a clear political message. In March 2025, the CMA launched a review of its merger remedies, potentially signaling an increased willingness to accept behavioral remedies as an alternative to mandatory divestitures.

Regulatory – FDI Regimes

FDI screenings in 2025 will be shaped by new national leaderships, rapidly emerging technologies, and evolving geopolitical dynamics. Heightened tensions between the United States and China – and to a lesser extent, the European Union – are expected to continue to influence the direction and enforcement of FDI regimes. Globally, several new FDI frameworks are taking shape: Singapore’s FDI regime is coming into force, changes are expected in Canada, and the economic transformation of Gulf states, particularly Saudi Arabia, is driving increased outbound investments by sovereign wealth funds.

In Europe, the focus on supply chain security and technology self-sufficiency is deepening. The European Union is advancing its ambition to reduce reliance on non-European suppliers for critical technologies. France is expected to tighten FDI controls around AI and quantum technologies as part of its renewed emphasis on “strategic autonomy.” Similarly, the Netherlands has announced plans to expand its regime to include emerging technologies such as AI and biotechnology, while Germany and Italy are likely to refine their frameworks to balance economic openness with national security concerns. The UK’s new government also has signaled a review of its FDI regime, and Ireland’s long-anticipated FDI screening regime is now in effect, with Bulgaria’s expected to follow soon.

In the United States, the Committee on Foreign Investment in the United States (CFIUS) continues to play a central role in reviewing both controlling and noncontrolling investments in U.S. businesses with national security sensitivities or supply chain vulnerabilities. The Trump administration is expected to maintain many of the Biden administration’s priorities while expanding focus on China. A newly issued National Security Presidential Memorandum (NSPM) proposes certain measures, including a fast-track process to facilitate investments for select allies, time-limited mitigation agreements, and an expansion of CFIUS’s jurisdiction in critical areas. In parallel, the administration is considering broadening the outbound investment security program to cover a broader range of technologies and Chinese-affiliated entities.

Across other advanced economies – especially in Europe, North America, and East Asia – FDI screening regimes have become increasingly rigorous, particularly in sectors involving critical infrastructure, advanced technologies, and defense. In contrast, jurisdictions in Asia, the Middle East, Africa, and Latin America take a more lenient approach, requiring FDI filings less frequently outside of sensitive areas. This trend is expected to continue as many of these more challenging or growing economies look to avoid jeopardizing foreign investment.

China’s FDI regime remained largely unchanged in 2024, but rising trade tensions and macroeconomic pressures have prompted a more proactive policy shift in 2025. The Ministry of Commerce (MOFCOM) and National Development and Reform Commission (NDRC) have introduced a 2025 action plan aimed at strengthening foreign investor confidence and attracting high-quality foreign investments aligned with national economic objectives. Key priorities under the action plan include: i) further liberalizing of market access (including the long-restricted telecommunications, medical, and education markets) to foreign investors by reducing the national or free trade zone negative lists for foreign investment; ii) enhancing the clarity, flexibility, and enforcement of its FDI regime by amending or implementing regulations on investment, financing, and M&A; and iii) implementing other measures to facilitate foreign investors such as expanding the scope of entry visa exemption. Despite these efforts, the PRC national security review regime and technology/data export controls will remain key considerations for transactions involving the outflow of PRC technology or data, even in sectors not explicitly listed in China’s negative lists.

See our Global FDI Legal Guide and our Foreign Investment Control Advisor for more insights.

Geopolitics

Americas

Optimism remains that a cross-industry boom in U.S. dealmaking is on the horizon, even as a second Trump administration introduces near-term political and economic volatility. 

While the business community largely anticipates the Trump administration to take a more pro-business stance, the administration’s “America First” approach — coupled with a broader global shift away from multilateral institutions and toward a more transactional approach to foreign relations — brings a new set of challenges and opportunities. The potential for renewed global trade tensions casts a layer of uncertainty over market dynamics.

Already, shifts in valuations and deal prospects are emerging across key industries in the United States — notably in the energy and automotive sectors — reflecting the distinction in policy priorities between the Biden and Trump administrations. Under Biden, stricter carbon regulations and generous subsidies for clean energy and electric vehicles promoted green investment. In contrast, the Trump administration has signaled a rollback of these subsidies (including provisions of the Inflation Reduction Act) and a renewed emphasis on deregulation and expanded fossil fuel development.

In Latin America, Argentina’s recently elected pro-business government under President Javier Milei took initial steps to curb inflation, leading to hope that the country could attract investors and reverse the country’s declining M&A activity. However, regional uncertainty persists. Mexico’s new government and Brazil’s ongoing macroeconomic instability — marked by local currency devaluation — contribute to a volatile investment climate. Nonetheless, Latin American infrastructure and energy investment is expected to remain strong in 2025, as investors seek targets in countries with strong fundamental growth prospects and relatively flexible foreign investment regimes.

The impact of unilateral trade measures announced by the United States may generate instability in the Americas and elsewhere. Treaties like the USMCA have historically provided legal certainty for dealmakers in North America. If those instruments lose credibility or standing, eroded investor confidence could disrupt deal flow and investment plans in the region. On the contrary, a new phase for the USMCA will trigger additional interest in the North American region for investors fleeing risks in other countries with a greater trade tension with the United States.

United Kingdom

Since the July 2024 General Election, the newly elected Labour government has made a concerted effort to promote the United Kingdom as an attractive jurisdiction for inward investment, with a strong emphasis on health care, defense, clean energy, and infrastructure as drivers of domestic growth. Backed by a substantial government majority in the House of Commons, the government is expected to pass its flagship legislation with relative ease, at least in the short term.

In parallel, the Chair of the Competition and Markets Authority has been replaced, and public commitments from other regulators reflect a focus on delivering economic growth. Even so, the most significant impact on the UK M&A market continues to come from uncertainty over the UK’s position in response to the Trump administration’s policies on international trade and geopolitical events. On balance, domestic political stability, for the time being, and a renewed focus on regulation for growth, should create a supportive backdrop for continuing growth in M&A activity in the near term.

Europe

Three years after Russia’s invasion of Ukraine, the conflict's ramifications remain significant across Europe, with defense spending emerging as a political priority among EU member states. This shift is driving transactions focused on enhancing supply chain efficiencies and bolstering energy security. However, the rise of far-right parties, particularly the growth of the Alternative for Germany (AfD) in Germany, complicates the political landscape, as these movements gain traction with support from influential figures within the Trump administration and its allies, potentially reshaping policy directions and international relations in the region. This evolving political climate contributes to uncertainty for businesses as they navigate fluctuating regulations and shifting public sentiment. Despite the uncertainty, the need for adaptation to the changing geopolitical landscape is likely to boost M&A activities in the region.

Deal activity in recent years has been dampened by high interest rates and diverging price expectations. However, recent interest rate cuts by the European Central Bank and the continued rise of private capital have eased the difficult financing environment and will continue to boost M&A activity.

Driven by the ongoing AI boom and the resulting demand for technology, the technology sector is likely to continue to lead European M&A activity in 2025. In addition, energy transition will propel M&A activity across Europe, as companies leverage M&A to adapt their business models to meet this challenge. Lastly, as tariff and trade policy changes unfold and the automotive sector faces economic challenges, EU companies are expected to make significant investments in the United States in an effort to gain a strong U.S. foothold.

Middle East and North Africa

The lowered intensity of hostilities throughout the Middle East has brought a measure of stability to the region. The ability of international and regional players to maintain the relative calm and further reduce tensions will be critical for dealmaking throughout the region and across the globe. The prospects of normalizing relations among Israel, the Kingdom of Saudi Arabia, and other countries in the region will have a transformative effect on regional and international trade.

In Israel, the economy has demonstrated resilience and there is demand for international investment in various areas of the economy, including technology, life sciences, defense, and energy, by investors who were previously wary of committing.

Emerging political arrangements and administrations, including in Syria and Gaza, will provide significant infrastructure reconstruction and other rebuilding and development opportunities.

The Middle East, particularly the Kingdom of Saudi Arabia, is receiving increased investments coming from the West and the East. Chinese companies are rushing into the Kingdom, as they discover a fast-growing market for infrastructure and manufacturing products, driven in part by the relatively wealthy population of many Gulf States, and from a recently improved political relationship between China and Saudi Arabia.

Asia-Pacific

India should remain a bright spot for M&A, driven by soaring investor confidence, favorable regulatory reforms, and continuing global shifts away from Western investment in China.

Similarly, Southeast Asia is benefiting from shifting market dynamics as global investors look to diversify their investments across key strategic locations. Indonesia’s growing population and improving regulatory framework has recently attracted significant infrastructure and technology investments, while Singapore’s innovation and business-friendly budget is projected to drive M&A activity in 2025. Vietnam will benefit from supply chain diversifications, with recent reforms in its real estate and health care sectors expected to drive M&A activity.

In Japan, low interest rates, weak currency, and growing private equity interest in takeover opportunities should lead to a continuing increase in transaction activity.

Chinese investors continue to face barriers investing into Western markets, but developing nations remain open to capital inflows from China, including Southeast Asia, the Middle East, Africa, and Latin America. Some investors from China focus on acquiring natural resources around the world as part of supply chain security, while others, including those in the technology space, are moving their headquarters to a more neutral jurisdiction such as Singapore in order to reduce geopolitical risk. Domestically, China’s anticipated fiscal stimulus and a shift toward softening monetary policy, along with governmental initiatives to create a more business-friendly environment, particularly for technology startups, could help sustain M&A activity.

U.S. Litigation Landscape

Controlling Stockholder Cases and Statutory Responses

The United States continues to experience the highest volume, globally, in both transactional activity and business disputes. Taken together, these elements produce a level of legal predictability that facilitates successful dealmaking under U.S. laws and norms. This trend is expected to continue in 2025 as businesses seek stability and certainty.

During 2024, the Delaware Chancery Court issued several decisions, involving controlling stockholder transactions, that drew scrutiny and sparked debate. As a result, several corporations announced plans to re-incorporate from Delaware in favor of U.S. states such as Texas or Nevada, seeking more favorable legal environments. In response, Delaware has enacted several amendments to its corporations statute. These proposed changes include safe harbor provisions for controlling stockholder transactions, which will enhance predictability in M&A transactions under Delaware law.

In parallel, over the course of 2024, the Delaware Chancery Court issued three post-trial decisions that clarified how “commercially reasonable efforts” covenants should be interpreted in the context of earnout disputes, providing dealmakers with greater clarity for contract drafting.

In Himawan v. Cephalon, Inc., the Delaware Chancery Court reviewed the facts and circumstances and ruled that the buyer had not breached its “commercially reasonable efforts” obligation. In each of Fortis Advisors LLC v. Johnson & Johnson and Shareholder Representative Services LLC v. Alexion Pharmaceuticals, Inc., however, the Delaware Chancery Court concluded that the buyers breached their efforts covenants, and, in one of those matters, the Chancery Court awarded the seller more than US$1 billion in damages. The Delaware Supreme Court affirmed the Himawan decision in January 2025 and is expected to rule on the Fortis Advisors and Shareholder Representative cases later this year. These forthcoming decisions will provide transacting parties with important new guidance on drafting and interpreting “commercially reasonable efforts” covenants, particularly in the context of earnout disputes and related matters.

See our Quarterly Corporate / M&A Decisions Update Series for more insights on these and other related matters.

Private Equity

We anticipate an increase in private equity transactional activity in 2025, with momentum expected to build during the second half of this year. Although uncertainty around interest rates persists — and some market indicators suggest potential rate hikes — sponsors remain under significant pressure to deploy and to return capital. This pressure, coupled with vast amounts of dry powder that sponsors are eager to invest, is likely to drive an uptick in deal volume.

As seen in 2024, we also expect continued growth in alternative deal structures beyond traditional buyouts, including structured preferred equity, convertible securities, co-investments, and joint ventures. As private equity and private debt providers increasingly collaborate to maximize returns on investment, bridge the gap in perceived valuations, and address market volatility, creative deal structures are likely to become even more prevalent.

In the months to come, sponsors will need to navigate an increasingly uncertain macroeconomic environment. Changes in tariff and trade policy – particularly likely to affect key sectors such as manufacturing, technology, and health care – pose risks to supply chains and valuation assumptions. Private equity firms pursuing cross-border deals or companies reliant upon global supply chains may need to incorporate flexible mechanisms such as contingent purchase price adjustments or supply chain resilience strategies.

Sponsors also are exploring secondary market solutions, including continuation funds and preferred equity recapitalizations, as liquidity remains a key concern for limited partners. The market has seen a shift toward more bespoke financing arrangements, such as hybrid credit facilities, enabling sponsors to extract liquidity while maintaining exposure to high-performing assets.

Investors with existing interests in funds will expect to see value creation. While tools like NAV-based lending and GP-led transactions supported distributions in 2024, investors are increasingly focused on how distributions are generated. As a result, sponsors will pursue full exits where possible to demonstrate realized value. At the same time, continuation funds and strip sales are gaining traction as sponsors look to extend hold periods on high-performing assets while delivering interim liquidity to LPs.

Competition from strategic buyers – including corporates, sovereign wealth funds, and family offices – is intensifying, particularly in auction processes. This dynamic will likely give rise to more intricate negotiations, often involving earnouts, seller financing, and minority stake sales as alternative exit options.

Improving economic conditions are expected to support portfolio company performance. Sponsors will continue partnering with management teams to drive value through industry knowledge, strategic bolt-on acquisitions, and operational improvements. Digital transformation initiatives will remain key value-creation levers, as firms look to drive EBITDA growth in an environment where multiple expansion becomes less certain.

Sectors to Watch

Consumer

Dealmakers enter 2025 with cautious optimism around a resurgence in consumer M&A, even as broader market headwinds persist. Ongoing challenges such as trade tensions, tariffs, geopolitical conflicts, and climate-related risks continue to create uncertainty.

In parallel, inflationary pressures and relatively high interest rates are weighing upon consumer sentiment. Despite these factors, there are signs that the sector could outperform 2024 both in deal value and volume.

As the year progresses, consumer M&A momentum is expected to strengthen, driven by stabilizing interest rates and cooling global inflation. Sector valuations are poised for an uptick as investor confidence in consumer assets rebounds. Private equity firms are anticipated to pursue exits of long-held assets and to deploy dry powder, while strategic players focus on repositioning their portfolios through transformative M&A.

Both financial sponsors and strategic buyers will closely monitor inflation, following a higher-than-expected increase in early 2025, as well as the impact of tariffs. However, with most indicators expected to trend favorably, consumer M&A is well-positioned for renewed deal activity and growing momentum in the year ahead.

See our 2025 Panoramic: Luxury & Fashion guide for more insights.

Energy

In the United States, energy M&A activity is expected to remain dynamic throughout 2025, with a notable shift toward oil and gas. Recent executive actions by the Trump administration that favor fossil fuel development may slow clean energy investment, particularly as environmental regulations are rolled back and the future of renewable energy tax credits remains uncertain. While these headwinds could dampen short-term deal flow, consolidation within renewable energy platforms and sustained interest in energy transition opportunities – particularly in voluntary carbon markets and select emerging technologies – is expected to continue to generate transaction activity.

In Europe, the energy sector remains oriented toward energy security, with ongoing investment in renewable development and platform optimization. M&A activity is supported by growing investment in battery energy storage systems and grid infrastructure. The European Union remains committed to green hydrogen, though market expectations for adoption have been tempered, likely reducing related deal flow. Political uncertainties and the risk of a trade war could further dampen overall deal activity in the region.

In Asia, energy is a sector to watch for its growth potential, government-backed clean energy initiatives, and increased M&A activity in renewables, LNG, and battery storage. China, India, and Japan are accelerating their energy transitions through policy support and investment in solar, hydrogen, and grid infrastructure.

See our Energy Hub for more insights.

Financial Services

M&A activity across banking and financial institutions is anticipated to accelerate in 2025. Lower interest rates, increased economic activity, and rising loan demand could support bank acquisitions.

In the United States, expectations of a more business-friendly regulatory environment under the Trump administration could lead to streamlined bank merger reviews, paving the way for additional consolidation.

In Europe, the push for cross-border bank mergers to enhance global competitiveness may gain momentum, though persistent political and regulatory hurdles remain key barriers.

M&A for non-bank financial institutions is also poised for growth. With FinTech now firmly embedded into the broader financial ecosystem, strategic consolidation is expected to intensify, including through bank-FinTech partnerships, acquisitions in the payment space, and expansions into on-chain transactions and digital wallets. Private equity and venture investors are likely to play a larger role, targeting scalable FinTech platforms and financial infrastructure providers. 

More investors are likely to enter the digital assets and blockchain space, while AI-driven financial services will attract further investment. Increased competition for technology-driven financial businesses is expected to drive valuations, particularly in the United States, where the Trump administration’s “pro-crypto” stance could further catalyze deal activity.

See our 2025 Financial Institutions Horizons guide webpage for more insights.

Life Sciences and Health Care

M&A activity in the life sciences sector is expected to remain robust in 2025, particularly in pharmaceuticals and biotech where well-capitalized buyers continue to pursue innovation. A pipeline of promising targets – combined with R&D challenges and a looming 2028 patent cliff for many blockbuster drugs – is likely to drive strategic acquisitions, particularly in oncology, rare diseases, and innovative therapies. Creative deal structures, including earnouts and milestones, will be prevalent to mitigate risks associated with early-stage science. 

Technology-driven companies are anticipated to remain in high demand. Companies that offer cloud computing, generative AI, and similar solutions are increasingly viewed as critical to accelerating R&D, clinical trials, and commercialization, making them attractive acquisition candidates.

In the United States, health care M&A continues to face headwinds associated with increased interest from state and local governments to privatize health care and the uncertain future of recent legislation impacting the sector, such as the Inflation Reduction Act. However, softening antitrust scrutiny and private equity interest may propel the continued consolidation of health care service groups and providers. For hospital systems in particular, shrinking operating margins will likely drive significant merger activity to achieve cost synergies.

Companies are also expected to focus on portfolio optimization by prioritizing their core products and disposing of less valuable assets as a way to drive shareholder value.

See our 2025 Life Sciences and Health Care Horizons publication for more insights.

Technology

Despite a start to the year hindered by rapid changes in the U.S. policy landscape and overall market uncertainty, the outlook for technology M&A in 2025 remains strong, driven by rapid advancements in AI, cloud computing, and cybersecurity.

Companies are anticipated to pursue acquisitions to accelerate innovation, address talent gaps, and capture increased market share, while private equity firms, armed with abundant levels of dry powder, will target high-growth startups in areas such as FinTech, enterprise software, and semiconductors. Software deals are likely to dominate the M&A landscape, as firms prioritize recurring revenue models and scalable cloud-based solutions.

Cross-border M&A is expected to increase as companies seek global expansion, while non-tech companies will increasingly acquire tech assets to enhance digital capabilities and boost productivity, particularly through AI integration. At the same time, more firms will look to streamline operations by divesting non-core assets and sharpening their strategic focus.

While regulatory scrutiny in the United States and European Union may slow megadeals, and geopolitical tensions, tariffs, and interest rate fluctuations will give rise to swelling uncertainty, if U.S. policy shifts stabilize then the sector’s drive for innovation and efficiency, combined with a favorable investment environment, should keep technology M&A at the forefront of corporate growth strategies. With this landscape, both strategic buyers and private equity players are expected to remain highly active in technology M&A.

See our AI Hub for more insights.