Translink Corporate Finance forecasts the forces reshaping M&A in 2025

Translink Corporate Finance predicts a shift in the global M&A landscape and unpacks emerging trends in 2025

The global mergers and acquisitions (M&A) landscape is poised for a robust 2025, driven by rapid technological advancements, increasing sustainability demands, shifting economic dynamics, and evolving consumer preferences. Drawing upon in-depth analyses from sector experts, Translink Corporate Finance has identified key industry-wide trends that signal a dynamic shift in deal structures, valuations, and strategic priorities as businesses adapt to this rapidly changing global environment.

Key 2025 trends include:

• Technological disruption and innovation: A shift towards more strategic investments in the Technology, Media, and Telecommunications (TMT) sector, particularly within Software as a Service SaaS. While valuations are adjusting, deal volume remains strong. Key opportunities lie in leveraging emerging technologies within IT services, although significant growth may take longer to materialise. The market will remain polarised, both in terms of appetite for an asset and valuation.
• Healthcare surge: A significant upswing in healthcare M&A, particularly in life sciences. Continuous innovation, substantial investment capital, expiring patents, and favourable valuations create a fertile ground for deals.
• Industrial transformation: Industry 4.0 and sustainability are considerable forces reshaping the industrial landscape. This drives M&A activity across various sub-sectors as companies seek to acquire new technologies and adapt to evolving environmental standards.
• Green revolution in energy and environment: Growing environmental, social, and governance (ESG) considerations, increased corporate and impact investments, energy sobriety, cleantech and agri-tech innovations will fuel sustainability-driven M&A, despite some local drawback on public support.
• Automotive consolidation and innovation: Rapid growth of the EV market is driving consolidations, strategic acquisitions of EV startups, and a focus on Connected Autonomous, Shared, and Electric (CASE) technologies.
• Food and beverage evolution: Sustainability, health-focused trends, and technological advancements will transform the food and beverage sector. Personalised nutrition, alternative proteins, and supply chain resilience are key areas to watch.

Here’s a detailed look at the trends impacting each sector, providing a better understanding of the opportunities and challenges in the 2025 M&A market.

A nuanced approach to TMT growth

The TMT sector, a consistent driver of M&A activity, is expected to maintain its momentum in 2025, albeit with a more discerning approach. Marc Irisson, Managing Partner at  Translink Corporate Finance France, and head of the TMT expert group says, “As valuations have been stable for over a year, deal volumes remain robust and growing to record highs, with Europe leading the charge. The divergence between outperformers and underperformers highlights the need for a nuanced approach to investing in SaaS. As we monitor the post-election landscape in the US and await Q4 results, we remain optimistic about the sector’s M&A prospects in 2025.”

Beyond SaaS, Irisson notes that the IT services sector is also ripe for transformation. Translink’s insights indicate that many organisations still have commitments to mission-critical projects. Companies that leverage emerging technologies, prioritise cybersecurity, and offer scalable, sustainable solutions will be well-positioned to capitalise on the opportunities in this evolving landscape.

The Translink Corporate Finance IT Services Valuation Index Q3 2024 highlights several key M&A drivers within IT services, including AI, blockchain, cloud computing and cybersecurity. “The adoption of these technologies will drive long-term innovation and create new avenues for M&A activity as companies seek to acquire expertise and capabilities in these high-growth areas,” adds Irisson.

Market correction and an innovation surge in healthcare

The healthcare sector is now seeing increased interest in M&A, fuelled by constant innovation, significant financial firepower accumulated during the COVID-19 pandemic, and a market correction that has made valuations more attractive.

Tim Brind, Director at Translink Corporate Finance UK, and head of the Healthcare expert group explains, “Two years of market correction have decreased and stabilised sector valuations, increasing investor appetite. Furthermore, the imminent expiration of many biopharma patents is forcing big pharma to build new pipelines. The sector will also see a rise in attractive opportunities driven by innovation in cellular therapies, mRNA, IT, digital, and data.”

Brind says these trends point to a robust 2025 M&A environment in healthcare, with a strong focus on innovation and strategic acquisitions.

Embracing Industry 4.0 and sustainability in industrials

Industry 4.0 technologies and sustainability are transforming the industrial sector. Henrik Schrøder, Managing Partner at Translink Corporate Finance Denmark, highlights technologies such as the Internet of Things (IoT), cybersecurity, cloud computing, mobile technologies, robotics, and AI as key factors that will significantly revolutionise manufacturing and increase the technological complexity in manufacturing.

Schrøder adds, “This technological revolution is expected to increase the demand for mergers and acquisitions as companies seek to acquire new capabilities or consolidate their positions in a rapidly changing landscape.”

The Translink Corporate Finance Industrials M&A Insights Report released in September 2024, explores emerging trends across various industrial sub-sectors, including:

• Plastics: Reducing CO2 emissions is increasingly important to consumers. As a result, recycled and lower-weight materials and bioplastics use is growing and impacting R&D spending.
• Wood and Paper: Recent trends in the wood and paper sector indicate increasing demand for recyclable products and eco-friendly packaging solutions. Industry dynamics are shifting toward adopting plant-based packaging and fully recyclable paper products instead of plastic products.
• Metals: This sector is also experiencing transformation through digitisation, which improves productivity and production quality. Digital technologies facilitate more efficient manufacturing processes and enable companies to explore alternative energy sources. These developments suggest a dynamic M&A environment in the metals sector, driven by technological advancements and sustainability concerns.
• Electronics: Emerging trends in consumer electronics are the Internet of Things (IoT), voice-assisted technology, Augmented Reality (AR) and Virtual Reality (VR), Artificial Intelligence (AI) and machine learning, advanced battery technology, smart appliances and connected homes. These trends indicate a strong potential for M&A activity in the electronics sector as companies seek to innovate and adapt to the changing technological landscape.

A green revolution in energy and environment M&A

Tanguy du Chesnay, Partner at Translink Corporate Finance France, highlights a remarkable 300% increase in environmental sustainability-focused energy and environment mergers and acquisitions from 2022 to 2023, reflecting a significant market shift toward green investments.

He adds, “The growing demand for ESG-centric business models, the rise in corporate and impact investments, and the emergence of cleantech and agri-tech are key M&A segments driving this trend. The momentum, established over the last five years, seems to surpass some local and temporary concerns on some regulation that went sometimes too far, and the outlook for the sector is mostly bright, with continued expansion of ESG-driven M&A opportunities, increased focus on startups and SMEs offering environmental solutions, and an enhanced role for M&A advisors specialising in sustainability.”

These trends are supported in Translink Corporate Finance’s 2024 energy and environment sector findings, which unveil key trends including:

• Growing demand for ESG-centric business models: There is an increasing focus on ESG considerations across industries. Companies must address these factors to avoid reputational and financial risks, aligning operations with sustainable and socially responsible standards.
• Rise in corporate and impact investments in green ventures: More companies are investing in green and sustainable initiatives, signaling a long-term change in their investment priorities. This trend fosters collaboration between corporate ventures, impact funds, entrepreneurs, and M&A
• Emergence of energy controlled solutions, cleantech and agri-tech as key M&A segments: Innovations in cleantech, agri-tech, and green technologies are identified as priority areas, highlighting the rapid evolution and investment potential of these industries.
• Specialisation in mid-market advisory for energy and environment: Mid-market financial advisory services are increasingly critical to navigating the complex landscape of green technology investments, providing tailored M&A and fundraising expertise.

“The shift toward sustainable business operations and changing consumer preferences will further accelerate investment in ESG-compliant companies, creating a robust market for M&A. Startups and smaller enterprises with scalable green innovations are expected to attract more attention, presenting financially viable opportunities for investors and M&A advisors,” says du Chesnay.

He adds that advisory firms with expertise in sustainability-driven deals will also play a pivotal role in helping companies meet regulatory requirements, achieve sustainability goals, and remain competitive.”

Consolidation and transformation in automotive M&A

The automotive M&A market is expected to remain active, with consolidations driven by technological advancement, market expansion strategies, and the continued need for innovative solutions. Stuart Hands, Partner at Translink Corporate Finance UK, explains, “The enhanced focus on EVs and CASE technologies will drive consolidation for scale and strategic growth in EV and autonomous driving sectors. We also expect to see increased divestment of non-core assets by traditional automakers to free up capital for investment.”

He adds that cost-cutting and mergers to create efficiencies could drive M&A activity. Therefore, strategic manoeuvring will be crucial for companies seeking a strong position in this rapidly changing landscape. The M&A Automotive Insights Report published by Translink Corporate Finance further explores these dynamics, highlighting the significant consolidation and innovation occurring within the EV and autonomous driving sectors.

Sustainability, health, and technology in food and beverage M&A

Deger Becer, Partner at Translink Corporate Finance Turkey, states that sustainability will remain a significant megatrend in 2025, with increased emphasis on reducing carbon emissions, minimising waste, and adopting regenerative agricultural practices. He adds, “Food and beverage industry stakeholders stand to benefit from enhancing sustainability efforts in response to consumer expectations, governmental regulations, and environmental challenges.”

These insights are explored in detail in Translink’s Food & Beverage M&A Industry Insights Report FY 2024. The report unpacks the sector’s evolving landscape, including:

• Health-conscious consumption: The focus on health and wellness will continue to evolve, with a significant shift towards personalised nutrition. Consumers will increasingly seek food products tailored to their specific dietary needs, driving the demand for data-driven solutions, including AI and wearable technologies offering customised recommendations.
• Tech-enabled food production: Technological advancements will continue to reshape the industry, with innovations in precision fermentation, lab-grown proteins, and vertical farming gaining traction. Companies innovating in protein technologies and personalised nutrition will see heightened interest from investors looking to align with ESG goals.
• Supply chain resilience: In 2025, companies will increasingly invest in building more agile and transparent supply chains that can withstand external shocks, such as geopolitical instability and climate-related events, ensuring an uninterrupted supply of raw materials and finished products.

Navigating the evolving 2025 M&A landscape

Translink Corporate Finance’s outlook paints a picture of a dynamic and transformative 2025 M&A landscape, a trend evidenced by the firm’s robust performance in 2024. Companies looking to thrive in this environment must embrace innovation, prioritise sustainability, and adapt to shifting economic dynamics.

Furthermore, there’s likely to be an increasing emphasis on cross-border and hybrid deals, as businesses seek to expand their global reach and diversify their portfolios. With its global footprint of experienced advisors, deep sector expertise, and strong dealmaking track record, including a particularly successful 2024, Translink Corporate Finance is well-positioned to help businesses navigate this complex landscape. Its insights, drawn from extensive research and local market experience, provide a valuable roadmap for companies seeking to understand the forces shaping the future of M&A to achieve their strategic objectives in 2025 and beyond.