What’s Driving the Surge in Deal-Making?

Despite a year marked by geopolitical uncertainty, higher tariffs, and slowing growth, we've seen a surge in deal making activity in 2025. So why has the M and A market been so resilient? And can this current wave of M and A activity continue in 2026? To help unpack the state of deals and chart the road ahead, I'm joined by Goldman Stefan Feldgweis, head of global mergers and acquisitions in the firm's global banking and markets business. Stefan, welcome back to the program.

Thanks for having me.

Stefan, when we spoke about a year ago, the M and A market was just beginning to show signs of life. But since then, we've actually had a long list of headwinds. We've had Liberation Day that brought higher tariffs and a lot of concerns about sharply higher tariffs. There's been broader policy uncertainty, macro uncertainty. And most recently, of course, we've had the longest US government shutdown in history. So a lot of headwinds, but the M and A activity has actually picked up very sizably. So why is that given all of these headwinds?

It's interesting. It's actually very interesting. The first quarter of the year, as you said, there was a fair degree of uncertainty post election heading into 2025 where people weren't sure how it would play out. And so the first quarter was relatively quiet, I would say. April was extremely quiet post Liberation Day. Heading out of April into May, you started to see a crescendo of transactions, particularly on the larger side, and then I would say the last three months heading into the fall and the winter has rivaled what we saw in 2021, which has been the most active. In fact, in my career,

What is driving that, again, given all these headwinds we've experienced?

So there are definitely headwinds. There's still geopolitical risk. There's still interest rates that can restrain things. There's still black swan risks, and some of those have happened. There's still uncertainty around regulation around the world. That being said, the strategic imperatives coming out of COVID to reposition businesses, not for the next two years, but for the next twenty or thirty, were severely challenged by the headwinds, I would say, in the prior four or five years. Coming into the 2025, capital markets wide open, the ability to finance, the ubiquity of public and private c

So you mentioned this surge in mega deals. What's driving that in particular?

Well, it's really all sizes. And so we focus most, as you know, on transactions $500,000,000 and up, and those are up 20 to 30% in total. Mega transactions, as I mentioned, up a 100%. What's driving those is for a period of time, there were large transactions, either in certain industries, just given the need for very large financings, that were difficult to get done. And whether that was receptivity by sellers, whether that was the aggressiveness of buyers, or whether that was just the timing where buyers thought that they could get things done from a financing, from a regulatory, from a geop

So you said all sizes. What about industries or geographies? Are there particular trends you've observed as this activity has increased?