Global M&A industry trends: 2025 outlook
M&A in 2025: Big deals, winning hands, and wild cards. Megadeal momentum returns to the market—but dealmakers will need to expect the unexpected.
Companies adapting to a COVID-changed world are rushing to reconfigure their businesses, fuelling M&A activity. But PwC research has shown that 53% of corporate acquirers underperformed their industry peers.
As leaders aim to forge new equations for growth by pursuing acquisitions, what can they do to ensure their investments create sustained value?
To answer this question, PwC examined 800 deals, including the 50 largest acquisitions across 16 different sectors completed over the past decade.
The results reveal one factor that plays a pivotal role in successful M&A activities—a capabilities fit between buyer and target—plus five steps leaders can take to integrate capabilities considerations into impactful deal-making.
Deal performance vs. stated strategic intent
Deal performance vs. capabilities fit
Leading local market index
Whether a company is aiming to consolidate, diversify or enter a new market, there’s one element that has been shown to differentiate a successful deal: a capabilities fit between the buyer and the target.
Capabilities—or a set of strengths that creates unique value—differ greatly between companies. Thus, when an acquirer is pursuing M&A, it’s important to ensure that the strengths of both players complement each other.
Indeed, our study has shown that the strategic intent of a deal has little to no impact on value creation. What generates value—and a positive total shareholder return (TSR)—is a capabilities fit that allows companies to leverage or enhance their capabilities. The alternative? A pitfall we call a limited-fit deal that can result in a significant loss in TSR following a transaction.
The frequency of capabilities-driven deals (enhancement and leverage) differs widely across industries—from 38% of deals in oil and gas to 92% in pharma and life sciences. Yet despite the variance, a positive capabilities premium was found in all 16 industries we analysed.
Share of deals by stated strategic intent (%)
Share of deals by capabilities fit (%)
Capability access
Product/category adjacency
Geographic adjacency
Consolidation
Diversification
Limited fit
Enhancement
Leverage
| Number of deals by Stated Deal Intent | Number of deals by Capabilities Fit | |||||||
|---|---|---|---|---|---|---|---|---|
| Sector | Capability Access | Product/Category Adjacency | Geographic Adjacency | Consolidation | Diversification | Limited Fit | Enhancement | Leverage |
| Pharma and life sciences | 12 | 48 | 8 | 32 | 0 | 8 | 30 | 62 |
| Health services | 12 | 20 | 8 | 60 | 0 | 10 | 28 | 62 |
| Telecommunications | 30 | 24 | 20 | 24 | 2 | 10 | 48 | 42 |
| Automotive | 20 | 40 | 18 | 20 | 2 | 14 | 46 | 40 |
| Power and utilities | 4 | 16 | 44 | 36 | 0 | 16 | 28 | 56 |
| Technology | 26 | 34 | 8 | 28 | 4 | 16 | 42 | 42 |
| Industrials | 10 | 48 | 8 | 28 | 6 | 18 | 46 | 36 |
| Chemicals | 10 | 46 | 20 | 20 | 4 | 24 | 34 | 42 |
| Consumer goods | 4 | 42 | 22 | 30 | 2 | 26 | 14 | 60 |
| Metals and mining | 6 | 14 | 28 | 50 | 2 | 30 | 18 | 52 |
| Insurance | 4 | 28 | 22 | 44 | 2 | 32 | 38 | 30 |
| Retail | 2 | 38 | 18 | 34 | 8 | 32 | 12 | 56 |
| Banking, capital markets, asset and wealth management | 12 | 12 | 26 | 48 | 2 | 44 | 46 | 10 |
| Entertainment and media | 28 | 18 | 20 | 30 | 4 | 44 | 38 | 18 |
| Transportation and logistics | 8 | 16 | 38 | 36 | 2 | 50 | 22 | 28 |
| Oil and gas | 14 | 12 | 34 | 36 | 4 | 62 | 18 | 20 |
Prevalent in industries experiencing disruption, capabilities enhancement deals bring an acquirer capabilities it doesn’t already have, often enabling it to thrive amid a changing competitive landscape. Enhancement deals generate an annual TSR premium of 2.5% points above local market indices and represent 32% of the deals tracked in our study.
When an acquirer buys a company that it believes will be a good fit with its existing capabilities, it’s called a capabilities leverage deal. This type of deal leverages the buyer’s capabilities to strengthen the target and results in an average annual TSR of 3.9% points above local market indices—the highest of our three categories. Forty-one percent of the deals examined in our study were leverage deals.
Representing 27% of the deals analysed in our study, limited-fit deals performed the worst of the three categories. Such deals occur when the acquirer largely ignores capabilities and the transaction doesn’t add to or leverage the acquiring company’s capabilities in any major way. Limited-fit deals have a negative annual TSR compared to local market indices—on average -10.9% points—meaning they typically destroy value compared with the market.
As part of the PwC network, Strategy& helps clients solve their issues from strategy through to execution. We do that by combining our strategy consulting expertise with the vast capabilities of the network, to help you move your business forward with confidence.
Strategy& has found strong evidence that deals leveraging or enhancing a buyer’s key strengths produce significantly better results than those lacking a good capabilities fit. And when it comes time to revamp a portfolio, too many companies pursue deals to grow in size, rather than aligning their M&A strategy with their capabilities. We can help.
Our analysis of 800 large deals shows the premium that arises for companies that apply a capabilities lens in their M&A activities. How can your company emulate these companies’ success? Where do you start if capabilities fit has not been a key driver of your deal-making?
M&A in 2025: Big deals, winning hands, and wild cards. Megadeal momentum returns to the market—but dealmakers will need to expect the unexpected.
As businesses around the world continue to manage the fallout of COVID-19, having a value creation plan has never been more important.
The drivers of enterprise value extend beyond financial productivity — and as disruption intensifies, businesses must adapt to avoid value destruction.
PwC's Deals practice provides guidance in such areas as corporate strategic acquisitions, divestitures, private equity investment, restructuring & recovery, delivering deal value, and corporate strategic acquisitions
