The global deal landscape has slowed during the first two months of 2025, with overall deal volume dropping 9% compared to the same period last year. Europe has seen a sharp contraction, while India, Japan and the UAE have shown resilience despite the broader downturn, reveals GlobalData, a leading data and analytics company.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “This decline is indicative of a challenging environment, influenced by factors such as geopolitical tensions, inflationary pressures and macroeconomic conditions that have dampened deal-making sentiments.”
An analysis of GlobalData’s Deals Database revealed that all the deal types under the coverage, mergers & acquisitions (M&A), private equity and venture financing, registered decline in volume during January-February 2025 compared to January-February 2024.
M&A deal volume has seen a year-on-year (YoY) decrease of about 9% during January-February 2025, signaling a cautious approach from businesses that may be reevaluating their growth strategies amid the uncertainty.
Similarly, the number of private equity deals have contracted by about 3%, suggesting that investors are becoming more selective in their investments, possibly prioritizing quality over quantity in the current market conditions.
Venture financing deals have also taken a hit, with the YoY decline in volume pegged at about 9%, reflecting a tightening of capital availability for startups and emerging companies, which often rely on such funding to fuel innovation and growth.
Bose adds: “Even though the intensity varied widely but all the regions experienced subdued deal activity during the review period. Meanwhile, the trend remained a mixed bag among different countries with some showcasing improvement in deal volume while some experiencing decline.”
Europe has been particularly hard hit, with a staggering YoY decline of around 16%. This downturn is reflective of the ongoing economic challenges faced by the region, including energy crises and inflation, which have created an uncertain investment climate.
In contrast, North America, Asia-Pacific and the Middle East and African region have shown relative resilience, with modest declines of around 4%, 8% and 4%, respectively. Meanwhile South and Central America have experienced a contraction of around 13%.
The US, while still leading in deal volume, has seen a decline of around 3%. The UK and China, however, have faced more significant challenges, with decline of around 20% each. Notably, India, Japan and the UAE have bucked the trend and showcased improvement in deal activity during the review period.
Bose concludes: “While global deal activity slows, markets like India, Japan, and the UAE show resilience, driven by stable economies and demand for innovation. Going forward, we may see a more region-specific deal landscape, with investors focusing on growth opportunities in emerging markets while exercising caution in more uncertain economies.”