M&A deals top $1tn in third quarter
Global dealmaking is up by a third this year, setting 2025 up to be the best 12-month stretch since 2021
A record number of megadeals, such as Monday’s $55bn leveraged buyout of Electronic Arts, has propelled global mergers and acquisitions activity past $1tn in the third quarter.
The take-private deal for the video games maker behind the Madden NFL and Battlefield series capped an unusually busy summer for dealmaking, with 14 deals valued in excess of $10bn announced globally, according to data from the London Stock Exchange Group.
The series of megadeals has emboldened dealmakers to believe the much-heralded M&A boom under US President Donald Trump could be coming to fruition, after hopes were initially dashed by the uncertainty created by the tariff policy announced on “liberation day”.
Railroad behemoth Union Pacific’s $85bn takeover of Norfolk Southern, mining company Anglo American’s $50bn tie-up with Teck and cyber security group Palo Networks’ $25bn acquisition of CyberArk rank among the biggest deals of the summer.
In total, there were 47 deals valued at more than $10bn over the first three quarters, the highest number since LSEG records began. Big break-ups, such as the decision to split Kraft Heinz and Keurig Dr Pepper’s plans to hive off its coffee business after buying JDE Peet’s, have also been driving deal activity.
“The previously unimaginable now seems possible,” said Eric Tokat, co-president at boutique bank Centerview Partners. “Deals that people didn’t think are possible are now being brought back to the table.”
“A lot of decision makers are re-examining work that they did several years ago on a deal and asking for it to be refreshed through the lens of the realities today,” said Brandon Van Dyke, a partner at Skadden Arps who advised on the railroad megamerger.
“The impetus to dust off those plans could be driven by a different market environment, a different antitrust approach or just the confidence to do deals,” he added.
Globally, M&A activity this year has reached nearly $3.1tn, up 35 per cent compared with the same period last year and putting this year on track to be the best 12-month stretch since 2021. Private-equity deals take up a smaller share of M&A compared with this time last year, but interest rates are likely to boost sponsor activity.
The upshot has been a near-record fee haul for investment banks. Globally, $95.4bn of investment banking fees were generated in the nine months to the end of September, the second-highest year-to-date total since LSEG records began.
Bank of America is set to earn an estimated $130mn fee from advising Norfolk Southern on the railroad tie-up if the deal makes it through a two-year antitrust review, potentially eclipsing the record $123mn fee JPMorgan Chase earned from advising Allergan on its $63bn sale to AbbVie.
Charles Ruck, global chair of the corporate department at Latham & Watkins, who advised EA, Teck and CyberArk on their megadeals, said he was at his busiest since the special purpose acquisition company craze in 2021.
“It’s been a while since the market has rewarded companies for doing deals and I think we’re there again,” said Ruck. “M&A is infectious: the CEO of company A does a big deal and then the CEO of company B starts thinking maybe I need to do something.”
“The M&A market is on fire at the moment and I don’t think that’s changing anytime soon,” said Jacob Kling, co-chair of Wachtell Lipton’s M&A practice. “We are seeing huge transformational deals getting done in a way we haven’t seen in years.”