Evolving regulatory and political pressures on global M&A activity in 2025
In the last quarter of 2024, the mergers and acquisitions landscape appeared poised for robust recovery, buoyed by a surge in CEO confidence reaching unprecedented levels. Optimism was driven by favourable economic indicators, more realistic and welcoming regulatory environments, and increased corporate liquidity. This momentum faltered in early 2025. January and February were marked by a notable deceleration in deal activity, coinciding with shifts in the political and regulatory landscape.
The introduction of worldwide tariffs on Liberation Day in March 2025 further impacted the M&A environment, precipitating a sharp decline in CEO confidence and reflecting concerns about the economic repercussions of these trade measures. Market participants grew wary of potential regulatory hurdles and the unpredictable trajectory of economic policies linked to the tariffs, dampening enthusiasm for new transactions.
The case of the US
US President Donald Trump's influence has been pivotal in shaping the M&A landscape. The administration's aggressive trade policies and introduction of protectionist measures have contributed to heightened global economic uncertainty and led to fluctuating investor confidence, particularly in cross-border deals, as businesses grapple with the potential long-term effects of shifting trade relationships.
Regulatory complexity remains a formidable hurdle. Foreign Direct Investment (FDI) regimes vary widely, often requiring bespoke legal strategies for each jurisdiction. Antitrust scrutiny is also intensifying, with regulators in many countries expanding their oversight.
The case of the UK
While Europe holds a steady regulatory course, the UK appears to be opening a new chapter. Deregulation is on the rise, even as the Competition and Markets Authority strengthens its oversight of tech agreements.
Particularly interesting is the subtle shift emerging under the CMA's new interim Chair, Doug Gurr, formerly of Amazon. While digital monopolies remain a key concern for the CMA, Gurr's appointment and the government's drive for economic growth could suggest a more receptive environment for tech mergers and acquisitions that contribute to prosperity.
This dynamic evolution could dramatically redefine the UK's standing as a tech M&A hub, potentially boosting its appeal for certain deals even as regulatory scrutiny remains strong.
Sectoral resilience and emerging trends
Despite the overall slowdown, increased M&A activity has been observed in sectors less susceptible to tariff impacts. Technology, healthcare, and domestic-focused consumer goods have shown resilience, leveraging their insulation from global trade tensions. In contrast, sectors dependent on international supply chains – such as automotive and industrial manufacturing – are treading carefully. Deals in these areas are increasingly subject to delays, renegotiations, or cancellations.
AI is increasingly transforming decision-making within the mergers and acquisitions landscape through practical, real-world applications. Organisations are implementing AI-driven systems to automate the creation of preparation memos, significantly reducing the time spent on manual documentation. AI is enhancing the due diligence process by rapidly analysing vast datasets to uncover critical insights.
M&A in Malta: Strategic sectors amid global disruption
Malta faces challenges from global economic shifts: trade tariffs, regulatory changes, and market uncertainty have dampened investor confidence and slowed cross-border M&A. Sectors reliant on international trade are particularly affected. Yet, financial services, technology, and healthcare remain resilient, driven by strong local demand and EU membership. This contrast underscores the country's ability to maintain M&A activity in strategic sectors despite wider global pressures.
The second half of 2025 will be characterised by a complex interplay of regulatory shifts, geopolitical developments, and technological advancements. While uncertainties persist, particularly around tariff negotiations and regulatory policies, sectors insulated from these headwinds continue to thrive.
Global investment flows remain robust, with strategic shifts towards high-growth regions. As AI continues to evolve, its integration into M&A processes promises to further transform the landscape, offering new avenues for value creation and strategic growth.
This article was first published in the Times of Malta on 27/07/2025.
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