Signs of Life in M&A

Jina Yoon | Chief Alternative Investment Strategist

Last Updated: November 05, 2025

After a slow couple of years, the mergers and acquisitions (M&A) market is finally picking up momentum. According to Pitchbook, the total number of deals for the first three quarters of 2025 increased by 13% compared to the same period last year. The total deal value for the same period in 2025 reached $3.4 trillion, up 25% from the same period last year as well. The recovery we are observing is not just about the rise in the number of deals but also about the value of the deals, driven by the rise in large, strategic, sponsor-backed transactions. In terms of regions, North America continues to lead the way. While among sectors, technology continues to lead, understandably with the hype of artificial intelligence and digital transformation.

Global M&A Value Trending Higher

Source: LPL Research, Pitchbook 09/30/25
Disclosures: Past performance is no guarantee of future results.

Global M&A Activity on the Rise

Source: LPL Research, Pitchbook 09/30/25
Disclosures: Past performance is no guarantee of future results.

For merger arbitrage investors, this uptick is a welcome change. While much of the success merger arbitrage managers have shown this year is the result of announced deal spreads tightening due to the strength in equity markets, the rebound in M&A activity will serve as an additional tailwind for the coming quarters. Simply put, there just were not enough deals to build a diversified book for the last couple of years, and many spreads were too tight to justify the risk. Now, bigger and more complex transactions are creating more opportunities. Spreads remain attractive as well, in part because markets are still pricing in regulatory and financing uncertainty.

Private equity has finally gotten a bit of a break, too. After years of slow exits and few chances to deploy capital, sponsors are once again able to find both buyers and sellers. The value of exit deals has climbed 18% year over year and the number of exits also rose approximately 9%, pointing to a broader and deeper pipeline of realizations taking shape. That momentum has allowed general partners to recycle capital and finally begin to deliver the long-awaited distributions to limited partners, even though some of the key metrics remain below their long-term averages.

Overall, it is too early to call this a full-fledged recovery and there still are many roadblocks — inflation remains stubborn in parts of the economy, rate cut expectations could be disappointed, and trade uncertainty still lingers. Still, the change in tone is unmistakable. The M&A market is not back to full speed, but we believe it’s moving in the right direction.

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Jina Yoon

Jina Yoon is LPL Financial’s Chief Alternative Investment Strategist. Her investment career includes over 15 years of experience.