M&A in 2025 – Opportunities, challenges and the legal view

After a record-breaking year in 2024, the UK mergers and acquisitions (M&A) market in 2025 appears to be on a steadier footing.

While headline deal values have fallen, there is no shortage of activity, especially among SMEs and in resilient sectors, such as healthcare, technology and manufacturing.

This is not a market in decline but one that is recalibrating. Deals may be smaller, but opportunities remain strong, particularly for those who are well-prepared and legally protected.

The shape of the market

• Mega-deals are fewer – Multi-billion-pound transactions have slowed, but mid-market deals are thriving.
• SME activity is strong – Sub-£100 million deals now dominate the landscape, showing sustained appetite for smaller, strategic acquisitions.
• Sector trends – Healthcare continues to grow, technology remains highly active and manufacturing retains international interest. Consumer-facing markets are quieter, reflecting shifts in demand.
• Private equity influence – While reduced compared to last year, PE houses remain a key source of funding and acquisitions.

What this means for business owners and investors

For those considering a sale, 2025 could be a favourable time. Buyers are active, valuations are more realistic and demand in sectors such as healthcare and technology remains strong.

For buyers, calmer competition creates opportunities to negotiate more favourable terms and pursue acquisitions that support long-term growth.

Either way, preparation is key and this is where legal considerations come into play:

• Deal structuring – Tailored structures are increasingly common, particularly where buyers are cautious. A well-structured deal can ensure the commercial terms work in your favour.
• Due diligence – With greater regulatory scrutiny and international involvement, thorough due diligence is critical to uncover risks before they impact value.
• Cross-border complexities – Many deals involve overseas investors or expansion abroad, requiring careful navigation of different legal systems.
• Risk allocation – Warranties, indemnities and carefully drafted contracts remain vital to protect both buyers and sellers against unforeseen liabilities.

Looking ahead

Despite wider economic uncertainty, the fundamentals remain encouraging. Interest rates are easing, liquidity is available and international investors continue to show strong interest in the UK. Analysts expect activity to accelerate towards the end of 2025 and into 2026.

The message is clear: while the era of blockbuster transactions may have slowed, opportunities remain plentiful for businesses that are strategic, well-prepared and guided by sound legal and commercial advice.

Sources: https://www.ons.gov.uk/businessindustryandtrade/changestobusiness/mergersandacquisitions/bulletins/mergersandacquisitionsinvolvingukcompanies/januarytomarch2025

https://www.mha.co.uk/insights/uk-business-deals-in-2025-signs-of-a-comeback-despite-global-challenges

https://www.hsfkramer.com/insights/2025-04/uk-public-ma-consolidated-update-april-2025