DealLawyers.com Blog

Earlier this month, Boston Consulting Group released its 2025 M&A Report in four parts. Chapter 3 addresses uncertainty. While often considered the “enemy of dealmaking,” the report shows that the impact of uncertainty on deal volume is more nuanced than that.

In turbulent times, average deal values plunge dramatically—down more than 34%, from $280 million to $186 million. This reflects caution amid an uncertain outlook, as few CEOs dare to embark on a headline-making deal when dark clouds are on the horizon.

Conversely, overall deal volume jumps by 27%, fueled primarily by a 70% surge in smaller transactions (less than $50 million). Adopting this “string-of-pearls” strategy of multiple small deals allows executives to deploy capital with reduced exposure.

Sector differences are pronounced. Cyclical sectors such as materials and technology see marked increases in deal activity as companies consolidate to manage volatility and seize opportunities, whereas more stable industries such as health care and consumer experience minimal change.

As uncertainty rises, deal makers prioritize risk avoidance over strategic diversification. Large and midsize cross-border and cross-industry deals plummet by 31% and 70%, respectively, while domestic, same-industry acquisitions surge by nearly 200%.

Wow! The magnitude of the shift in that last statistic surprised me. Also, take a look at Exhibit 4 of the report, which addresses strategic archetypes that are more or less effective in an uncertain environment.

On an unrelated note, as my kids start to age out of trick-or-treating excitement (too soon!), I shared my thanks to Dave on TheCorporateCounsel.net blog this morning for his reflection on Halloween last year. If you will be celebrating tonight, Happy Halloween! May the weather be good and the candy be your favorite.

– Meredith Ervine