“Animal spirits are back.”
That’s what Anu Aiyengar, global head of advisory and mergers & acquisitions (M&A) at JPMorgan Chase (JPM), said at the start of the year. She saw “high optimism in the business community” to make things happen.
The 2025 outlook for debt, equity, and M&A markets is positive, driven by expected declining interest rates, a more favorable IPO market, and a potentially easier-to-navigate regulatory framework.
Famous last words, anyone?
I’m not mocking her, for the record. You can go back and see that I said pretty much the same thing back in December and January. Me and everyone else, buoyed by the promises of the incoming pro-business Trump administration.
Also, in Aiyengar’s defense, she immediately added that “businesses must remain cognizant of geopolitical risks, inflationary pressures, and economic policy that could impact the markets.”
Boy, was she right about that.
As Barron’s reported:
Despite predictions for an M&A revival in 2025, dealmaking looked [dead on arrival] at the start of the year. The dollar value of announced deals globally in January and February was down 14% from the same period in 2024, according to London Stock Exchange Group, as companies waited for Donald Trump to take office.
There were, of course, bright spots.
There was Hewlett Packard’s (HPE) $13.4 billion buyout of Juniper Networks in January. And Alphabet (GOOG) easily topped that figure with its March decision to purchase cloud-security darling Wiz for a whopping $32 billion.
There were smaller buyouts, too, as Big Tech companies invested further into artificial intelligence and cyber security especially. But overall, M&A was sluggish in the first few months of 2025.
Then came the tariffs…
Small and large companies were left reeling over how to handle that jolting change. As a result, it put a chill on M&A.
Ernst & Young summed it up in a report at the end of the second quarter:
US mergers and acquisitions (M&A) activity contracted in the second quarter of 2025 (2Q25) as dealmakers sought clarity on the Trump administration’s evolving trade policies. The volume of US deals above $100m in value fell 5% in the quarter, according to the EY-Parthenon analysis of Dealogic data.
Fortunately for Aiyengar, myself, and all those other experts who predicted an M&A boom, however… this year isn’t over yet.
Not even close.
And with more trade deals being inked, is the M&A boom back on?
The answer appears to be “yes.”
The M&A Explosion
To quote that same Barron’s article, “Mergers and acquisitions are back in a big way, and stocks – big and small – should benefit.” Between April 8 and July 22 (though really between May and July), companies struck over $1 trillion worth of deals.
That’s up 34% year over year despite continuing back-and-forth tariff announcements and no cuts from the Federal Reserve.
Moreover, M&A activity seems to be ramping up even more in August, with two big acquisitions announced this week alone.
The first was Keurig Dr. Pepper’s (KDP) move to buy Dutch multinational coffee and tea company JDE Peet’s, owner of Peet’s Coffee. Announced Monday, the deal comes with an $18 billion price tag.
(After the dust settles, KDP will then break itself into two companies: one that sells just coffee and one that sells just cold beverages.)
Or how about Tuesday’s news that software company Verint is going private. Thoma Bravo (TBA), a leading private equity investment firm, will pay $1.23 billion – in cash – for the business. That’s on top of its previous agreements to purchase:
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Human resources software provider Dayforce for $12.3 billion (announced last week)
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Restaurant software maker Olo for $2 billion (in July)
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Boeing’s (BA) flight navigation unit and affiliated digital assets for $10.6 billion (on April 22)
Clearly, Thoma Bravo believes that this is the time to act. And it’s hardly alone.
As of July 25, global M&A activity had hit $2.18 trillion. That’s before two of Thoma Bravo’s deals, KDP’s big announcement, and even the $71.5 billion merger proposition between Union Pacific (UNP) and Norfolk Southern (NSC).
Better yet, as of July 25, it was tracking for $3.8 trillion by year’s end.
If true, that would be almost 8% above what we saw in 2024. And, again, this figure could climb still – showing that the dearth of deals we saw for so many months was nothing but a temporary setback after all.
I also have my own indicator for M&A activity – my daughter. Lauren Thomas covers M&A over at The Wall Street Journal. She has been very busy. And I suspect she’ll stay busy for a while yet.
That’s especially true considering all the money that’s still sitting on the sidelines from some very big entities.
Big, Bad Blackstone Is on the Move
Here’s some more dealmaking activity we’ve seen – and all from the same source, Blackstone (BX), the world’s largest alternative asset manager:
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Yesterday, TXNM Energy (TXNM) filed applications for approval of its proposed $11.5 billion acquisition with the New Mexico Public Regulation Commission, Public Utility Commission of Texas, and Federal Energy Regulatory Commission.
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Around a week ago, Blackstone agreed to acquire Shermco – a provider of full life-cycle electrical equipment services – from middle-market private investment firm Gryphon for about $1.6 billion.
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Three weeks ago, it signed a definitive agreement to acquire data analytics platform Enverus from Hellman & Friedman and Genstar Capital. The terms of the transaction were not disclosed, but Bloomberg believes the deal could fetch $6 billion.
This would mean that, just in the month of August, Blackstone has announced deals close to $20 billion. And that’s on top of the $145 billion it closed over the last 12 months.
Stephen Schwarzman, CEO and chairman, explained on the company’s second-quarter 2025 earnings call that these new deals are:
… setting the foundation for future value creation and what we believe is a favorable time. Our deployment has emphasized areas benefiting from long-term secular megatrends such as digital and energy infrastructure, digital commerce, private credit, life sciences, and India.
At the end of the second quarter of 2025, Blackstone had over $181 billion of dry powder to take advantage of these kinds of opportunities – which should help push it to over $1.2 trillion in assets under management. Because that certainly seems where it’s headed.
As Jon Gray, president and chief operating officer, pointed out,
There’s a more favorable regulatory environment than there’s been in a few years, of course, for M&A. And when you just look at the levels of M&A and IPO volume over the last three-plus years, it’s running about two-thirds below historic levels as a percentage of market cap of the stock market. So there’s just a lot of pent-up demand in the system.
I’ve been covering Blackstone for over a decade now. Since my first recommendation, shares have returned over 808% versus 209% for the S&P 500.
But my readers haven’t just benefited from big, bad Blackstone itself. In recognizing its real estate focus and attraction to acquiring smaller real estate investment trusts, or REITs…
I’ve also been able to point out likely takeover targets before they were announced, such as:
Source: Wide Moat Research
That’s why, for tomorrow’s article, I’ll be covering some potential takeover targets. You won’t want to miss it. It would appear the M&A boom wasn’t canceled… just temporarily postponed.
Regards,
Brad Thomas
Editor, Wide Moat Daily
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