Looking back on 2024 it was a medium busy year for M&A activity. The initial rush of excitement regarding data specialists, platforms and AI powered solutions turned into something more value-driven as the year went on. If you can prove your insurtech solution can save/make money, then you’ll find a buyer.
Next year will probably be much the same, perhaps with a slight bump in climate compliance start-ups attracting buyers. There’s no doubt that regulation will increase, regardless of the Trump presidency and other more centre-right or coalition governments taking power around the world. In the wake of the brutal murder in the US recently it will be interesting to see if political pressure is brought to bear on healthcare insurers and how they use AI algorithms to make decisions on care costs and treatment plans.
The logical solution to ever more regulation in global markets, plus climate targets, ESG, DEI reporting etc is automated systems, at the point of policy inception, recruitment, reinsurance, renewal, or claims settlement. A figure given then, uploaded by AI to relevant regulatory bodies, will enable insurers to deliver on their compliance obligations without having to employ a vast admin army to manually tick boxes. IE sees a flurry of acquisitions ahead in 2025 as the best companies in this field win over bigger insurance brands.
Meanwhile, here are some insights from Price Bailey on the activity this year;
Dealmakers prioritise quality over quantity
Analysis shows this year’s deal values are already significantly higher than in previous years. Enterprise Value (EV)—a measure reflecting market capitalisation plus debt, minus cash on hand—is 34% higher than in 2023 when considering mean figures, with a 40% increase when considering the median average.
Mean and median average of implied EV of global M&A deals (2018-2024)
But the volume of M&A transactions in 2024 has decreased substantially since 2021, when dealmaking soared due to favourable economic conditions such as low interest rates and moderate inflation. This year’s deal volume is 30% lower than in 2023—a considerable decline from the modest year-on-year decreases of 2% and 7% in 2022 and 2023, respectively.
This suggests that 2024 has seen a concentration of high-value deals, in contrast to previous years, such as 2021, which saw higher volumes but fewer large transactions.
“Despite the drop in overall deal numbers, the increase in average deal value this year reflects a clear focus on high-impact transactions,” says Chand Chudasama, Corporate Finance Partner at Price Bailey. “Companies are prioritising strategic, high-value acquisitions over sheer volume, and this signals a shift towards more calculated and meaningful investments in 2024.”
Volume of M&A deals from 2018 to 2024
There are early signs that volumes may still pick up before the end of the year. BCG’s M&A Sentiment Index suggests there will be a rise in dealmaking activity as we approach 2025, particularly in North America and Europe. Despite this, global deal volume will probably still be below the long-term average.
A variable global picture
M&A activity varies significantly on a global scale. Europe and the United States tend to take the lead, accounting for on average 37% and 38% of global deals since 2018, respectively. But when it comes to deal value, North America, the US, Central America and the Middle East have shown the strongest activity in 2024, in terms of median EV.
Volume of M&A deals by global region (2018-24)
Implied EV median by global region (2018-2024)
In the UK, M&A volumes align with the global trend, reflecting a 28% decline since 2023. This is notable given that the UK had previously maintained the strength of its 2021 M&A activity into 2022 and 2023, with minimal year-on-year growth of around 1%.
But the UK’s M&A values tell a more nuanced story: while the mean deal value is 14% lower than in 2023, the median deal value has increased by 5%. Mean averages can be heavily influenced by outliers, so examining median values can provide a more balanced perspective.
“This reflects a shift towards more mid-market activity and a broader trend of caution among UK investors,” says Chand. “With economic uncertainty lingering, firms are opting for transactions with more predictable returns, signalling a more conservative approach to M&A.”
Commercial services lead the charge
The leading sectors for M&A deals globally are commercial services, commercial products, and software, which account for 22%, 11% and 10% of annual deal volume, respectively.
In the UK, commercial services also consistently dominate deal volume, though there is a closer distribution among other top-performing sectors than on the global stage. However, no single sector consistently leads in deal value, as rankings fluctuate each year due to large, sector-specific outlier deals—highlighting sector-specific volatility and varying conditions in different years.
Towards a stronger M&A landscape in 2025
Although 2024’s M&A data offers an incomplete picture, it signals a shift towards a more selective, value-driven approach to dealmaking globally. As businesses continue to grapple with economic and geopolitical uncertainties, they are prioritising high-quality, strategic acquisitions over sheer volume. In the UK, this trend is reflected in the rise of mid-market transactions and a more cautious approach, as companies opt for deals that promise more predictable returns.
As they plan their dealmaking strategy for 2025, businesses globally should focus on rigorous due diligence, efficient integration and sustainable growth. This includes positioning M&A not just for expansion, but for long-term resilience, and ensuring that deals are not only impactful but also built for future stability.
Be the first to comment