2024 M&A: Dealmakers Are Feeling Bullish Again

After more than two years of sluggish activity, the merger and acquisition (M&A) market is showing signs of renewed optimism. KPMG’s mid-year 2024 survey of 200 U.S. dealmakers revealed growing confidence in the market’s recovery, with a majority of respondents expecting increased deal activity this year and next.

Positive Momentum for M&A Activity

According to the survey conducted in mid-June 2024, more than half (54%) of dealmakers anticipate that the number of transactions will outpace last year’s volume. The outlook for 2025 is even more promising, with 57% predicting further growth in deal volume.

Private equity (PE) firms are the most optimistic, with seven out of ten expecting more deals in 2024 than in 2023, and nearly four out of ten planning to execute at least one large, transformational deal.

Corporates share in the optimism, though to a lesser extent. While 49% expect more deals in 2024 than last year, PE firms maintain a more bullish outlook, with 84% anticipating growth in 2025, compared to 48% of corporates.

Focus on Transformational Deals

A key driver of this optimism is the increasing focus on transformational deals—transactions that significantly change the operations and strategy of a company. In 2025, 58% of PE firms and 52% of corporates plan to pursue at least one strategic transformational M&A, a clear indication that dealmakers are focusing on deals that will reshape their businesses.

While bolt-on acquisitions—smaller deals that complement existing operations—remain part of the M&A landscape, their importance appears to be waning. PE firms, in particular, are scaling back their focus on bolt-on acquisitions, with only 36% planning to make at least one such deal in 2025, down from 56% in 2024.

Challenges and Influences on Deal Activity

Despite the optimism, dealmakers are navigating a complex landscape shaped by several external factors. Shifting business valuations (59%), fluctuating interest rates (58%), and inflation (56%) are seen as the most impactful on current dealmaking. Many dealmakers believe that even a modest decline in interest rates—by 25 to 50 basis points—could spark more transactions.

Private equity firms are particularly concerned about antitrust regulation, with 60% citing it as a key factor influencing their decision to buy or sell businesses. Corporates, on the other hand, are feeling pressure from increased competition, with 51 % pointing to this as a primary factor in their dealmaking strategies.

Geopolitical tensions are also influencing M&A plans. Over a third (38%) of respondents said that these issues have either accelerated or increased the importance of their M&A activity.

The Role of Artificial Intelligence in M&A

Generative artificial intelligence (GenAI) is emerging as a significant consideration for dealmakers. While 64% of PE firms are looking to acquire GenAI technology through M&A, corporates are more likely to use AI to enhance their dealmaking processes, with 44% employing the technology in decision-making and 41% aiming to acquire new AI products.

The Bottom Line

While challenges remain, the M&A market in 2024 is experiencing a resurgence of optimism, with dealmakers increasingly looking to transformational deals and innovative technologies to shape the future. With the majority of both private equity firms and corporates expecting continued growth in 2025, the landscape appears poised for a period of heightened activity.

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