Mid-year M&A Report 2025 by Bain: How to Find Opportunity in Chaos

M&A in 2025: Separating the Signal from the Noise to Build a Future-Proof Portfolio

Bain’s Mid-year M&A report 2025 mentioned new wave of US tariffs as third tremor in last five years after COVID-19 and interest rate hikes, threatening to upend the confidence needed to place long-term bets on growth through acquisition.

In this environment, it’s easy to retreat, to hoard cash, and to wait for clarity that may never come. But according to Bain & Company’s pivotal M&A Midyear Report 2025, a crucial divide is emerging. While some companies freeze, a cohort of battle-hardened executives is doing the opposite. They are learning to not just survive the chaos, but to use it to their strategic advantage.

They are, in Bain’s words, “separating the signal from the noise.”

At NeoForm, we live at the intersection of strategic vision and execution. This report resonates deeply with our mission: to empower companies to navigate complexity and transact with confidence. This blog post will unpack Bain’s critical findings, explore the four key lessons from recent shocks, and provide a actionable framework for how your organization can emulate the winners in today’s challenging M&A landscape.

The New M&A Reality: Volatility is the New Normal

Bain’s M&A report 2025 frames the last five years through the lens of three major shocks:

The COVID-19 Shock (2020): A plunge in deal values and volumes to decades-low levels.
The Interest Rate Shock (2022): Soaring capital costs caused a reassessment of deal economics, slowing activity to near-pandemic lows.
The Tariff Shock (2025): New US tariffs create uncertainty, potentially disrupting long-term growth assumptions and supply chains.

The initial reaction to the April 2025 tariff announcements was a predictable dip in deal value. But unlike previous shocks, the bounce-back was swift, with deal value recovering significantly in May. This resilience suggests a market that is becoming inoculated against volatility. Executives are no longer surprised by disruption; they are learning to expect it and plan accordingly.

These shocks are layered on top of other persistent challenges:

High Interest Rates: While the ECB is cutting rates, US rates are likely to remain elevated, keeping the cost of capital high.
Regulatory Scrutiny: Antitrust hurdles remain significant across major markets.
AI Disruption: Generative AI is creating both massive opportunities and existential threats, forcing companies to allocate capital to new capabilities.

Despite this, the strategic M&A market has grown 11% year-over-year through May 2025. This isn’t a market-wide boom; it’s a targeted surge led by companies with conviction. The impact of tariffs is also uneven across sectors. Industrial M&A has been hit hard (-15% in value), while technology has rebounded strongly as companies across all industries race to acquire generative AI assets.

M&A Strategic Deal Value Report 2025 by Sector

The message is clear: the environment is challenging, but it is not impossible. Success is not determined by the market conditions, but by how you respond to them.

Lesson 1: Leverage Strength – Offense Wins in Volatile Markets

One of the most powerful lessons from history is that downturns create legendary acquirers. Bain recalls the Global Financial Crisis of 2008, which led to a 30% decline in median valuations. This period of fear gave rise to some of the most transformative—and profitable—deals in recent memory:

Kraft’s acquisition of Cadbury
Stanley’s purchase of Black & Decker

These companies used their relative strength and balance sheet fortitude to acquire strategic assets at discounted valuations, emerging from the crisis with vastly expanded market positions.

Fast forward to 2025, and we see the same pattern playing out.

The prime example is Salesforce’s $8 billion bid for Informatica, an AI-enabled data management company. Crucially, this offer was about 27% lower than the amount discussed in talks just a year prior. This wasn’t a panic buy; it was a calculated, opportunistic move. As CEO Marc Benioff noted, Salesforce had been tracking Informatica for nearly 20 years.

The Key Takeaway: Companies with a clear, multi-year M&A roadmap are best positioned to see past near-term volatility. They have done the strategic work upfront. They know exactly which assets are crucial for their future. When market dislocations create an opportunity to acquire those assets at a favorable price, they can act with speed and conviction while others are paralyzed by uncertainty.

For NeoForm’s Perspective: This is where rigorous, ongoing portfolio planning is non-negotiable. It’s not enough to have a list of targets. You need a dynamic M&A thesis that is constantly stress-tested against scenarios like tariff impacts, interest rate changes, and technological disruption. This deep preparedness is what allows you to pivot from defense to offense in a matter of weeks, not years.

Lesson 2: Disruption Creates Demand – Acquire Capabilities, Not Just Revenue

The post-COVID rebound, fueled by low rates and government stimulus, was characterized by a rush to acquire digital capabilities and talent. Bain’s long-term research consistently shows that frequent acquirers (those who do one or more deals a year) significantly outperform their less-active peers.

Today, the disruptive force is Generative AI. Despite higher interest rates and the absence of stimulus, forward-looking companies are turning to M&A to secure these game-changing capabilities. It’s not just tech companies; it’s companies across every sector.

Bain highlights several examples beyond the Salesforce-Informatica deal:

Siemens acquired scientific informatics company Dotmatics for nearly $5 billion.
Wolters Kluwer purchased Brightflag’s AI-enabled legal services for ~$500 million to bolster its information services business.

These aren’t scale plays; they are scope plays. They are acquisitions designed to fill a critical capability gap that would be too slow, too expensive, or too difficult to build internally.

The Key Takeaway: In an era of rapid technological change, M&A is the most effective tool for rapid adaptation. The question is no longer if AI will disrupt your industry, but how soon and how profoundly. Acquiring AI-native companies is a way to inject expertise, technology, and a new culture of innovation directly into your organization’s bloodstream.

For NeoForm’s Perspective: When pursuing capability-driven deals, traditional financial due diligence is not enough. You must add deep technology due diligence and cultural assessment to the process. The value of a 50-person AI startup isn’t just in its code; it’s in the minds of its engineers and its agile way of working. Failing to integrate these intangible assets properly is a primary reason these acquisitions fail to deliver on their promise.

Lesson 3: Pursue Scale – Consolidation is a Shield Against High Costs

When the cost of capital spiked in 2022, it fundamentally altered deal economics. This catalyzed a powerful swing toward scale deals—mergers that create market leaders with significant cost synergies. This trend is still defining the market in 2025, especially in high-fixed-cost industries like financial services, energy, and telecommunications.

Scale deals are about building defensible, efficient fortresses in a challenging economic climate. Bain points to two complex but highly strategic examples:

Global Payments & Worldpay: In a sophisticated three-way deal, Global Payments agreed to buy Worldpay to solidify its focus on merchant solutions while simultaneously divesting its issuer business to FIS. The projected synergies are enormous: $600 million in cost synergies plus $200 million in revenue synergies.
Borouge Group International: Abu Dhabi National Oil Company and OMV are combining their chemical subsidiaries and adding Nova Chemicals’ operations to create a $60 billion global chemicals powerhouse, targeting at least $500 million in annual cost synergies.

These deals are about more than just growth; they are about creating stronger, more efficient, and more competitive entities that can withstand pricing pressure, invest in innovation, and thrive in a high-cost environment.

The Key Takeaway: In sectors with margin pressure and high operational leverage, consolidation is a strategic imperative. The winners will be those who proactively seek out merger opportunities to achieve scale economies, rather than waiting to become a target themselves.

For NeoForm’s Perspective: Scale deals are among the most complex to execute, involving significant regulatory hurdles, intricate integration planning, and major cultural alignment. Success requires a “Day One” readiness plan that encompasses everything from IT systems integration to customer communication strategies. The synergy number is not just a figure for the investor presentation; it must be a detailed, validated, and accountable plan from the very beginning.

Lesson 4: Future-Proof Your Portfolio – Strategic Divestitures are Just as Important as Acquisitions

Perhaps the most counterintuitive lesson from Bain’s M&A report 2025 is that the best companies are using this turbulent time to divest, not just acquire.

The best executives are looking beyond the first-order impact of tariffs. They are modeling the second- and third-order effects: a global slowdown in end-user demand, supply chain realignment, and shifts in consumer behavior. Based on this, they are making bold decisions to prune their portfolios of businesses that won’t be competitive or core in the future.

Bain provides a powerful data point: divestitures during downturns (like the Global Financial Crisis or COVID-19) succeed and fail at the exact same rate as those in more normal times (see Figure 4 in the report). This shatters the myth that you should hold onto a non-core asset until the market “recovers” and valuations improve.

Examples abound in 2025:

ABB announced its intention to spin off its robotics division to maximize its growth potential, allowing ABB to focus on its core electrification and process automation businesses.
Global Payments, alongside its acquisition, sold its payroll business for $1.1 billion as part of its “pure-play” commerce strategy.

These companies are not being dissuaded by lower valuations. They understand that the strategic value of a focused portfolio—one where every business receives the right resources and attention to win—far outweighs the potential marginal gain from selling an asset at a higher multiple in an uncertain future.

The Key Takeaway: A proactive divestiture strategy is a hallmark of a sophisticated portfolio manager. It releases capital and management bandwidth that can be reinvested in core and growth areas. Letting go of the past is essential to investing in the future.

For NeoForm’s Perspective: Preparing a business for divestiture in a down market requires meticulous preparation. You must “carve out” the business to make it a standalone, attractive asset for buyers. This means preparing standalone financials, clarifying operational dependencies, and building a compelling equity story that resonates even in a tough climate. This process itself often unlocks value and insights, even if a sale doesn’t immediately occur.

Conclusion: How to Separate Your Signal from the Noise

Bain & Company’s Midyear M&A Report 2025 makes it unequivocally clear: volatility is the new playing field. The winners are not those who hope for a return to calm, but those who have built the strategic muscle to operate effectively within it.

The four lessons provide a blueprint for action:

Play Offense: Fortify your balance sheet and have a clear M&A roadmap so you can seize opportunistic deals at attractive valuations.
Acquire Capabilities: Use M&A as your primary tool to adapt to technological disruption, especially in AI. Look beyond revenue to acquire talent, technology, and new business models.
Pursue Scale: In capital-intensive industries, consolidate to build defensible positions and unlock massive cost synergies that protect against economic headwinds.
Prune Strategically: Be ruthless in portfolio evaluation. Divest non-core assets to sharpen your focus and free up resources, regardless of the current valuation environment.

🔗 Links for More:

Read the full report on Bain website or NeoForm LinkedIn page.

📌 About NeoForm:

At NeoForm Business Partners, we provide the strategic advice, transactional expertise, and executional support needed to navigate this complex environment—whether you are acquiring a transformative capability, pursuing a scale merger, or preparing a business for divestiture.

Visit our blog for more insights on Mergers & Acquisitions and private markets trends.

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