After a slight uptick in mergers and acquisitions during the first half of 2025, business leaders appear ready to pull back for the rest of the year.
That’s according to new analysis released Wednesday by PwC. From Jan. 1 through May 31, there were 4,535 deals in the U.S., up slightly from 4,515 during the same period in 2024, according to S&P Global Market Intelligence. But PwC’s research suggests the pace won’t last. In a May survey of nearly 700 executives, 30% said they’ve “paused or are revisiting pending deals.” The reason? Tariffs.
“Dealmaking growth stalled as companies struggled to predict how new tariff policies would impact business models — or if the policies would change before implementation,” PwC officials wrote in a midyear outlook report released Wednesday.
Kevin Desai, PwC’s US private equity leader and an author on the report, acknowledged the marginal growth in M&A activity but emphasized that it’s far lower than many in the business world had expected.
“We all entered 2025 assuming deal volume would pick up,” he said in an interview with CFO.com. “We were anticipating growth, but that growth didn’t come through.”
The share of respondents who said they’re pausing pending deals due to tariffs was spread across several industries. It was highest among respondents working in the energy, utilities and resources sector (41%) and lowest in the consumer market sector (24%). The relatively even split showed the wider implications of tariffs, Desai noted.
“You still see similar levels of M&A disruption” across several industries, he said. “That probably speaks more to the unpredictable nature of how these tariffs are going to affect the economy.”
Still, that’s not to say anyone’s expecting M&A activity to utterly cease this year. Thirty-one percent of respondents in PwC’s May survey said “initial steps are underway” to pursue new M&A deals, and another 20% said they’re “beyond initial steps” in the process. As PwC researchers see it, the Trump administration’s policy shifts are “likely short-term obstacles,” they wrote in the outlook report.
“Over the long haul, [the current administration’s policies] may contribute to existing economic, technological and geopolitical trends pushing businesses toward transformation,” PwC officials said. “The question is exactly how long it will take to reach a policy equilibrium in which C-Suite leaders are comfortable deploying capital on major new investments.”
To stay ahead of tariff effects or other policy shifts, PwC officials in their outlook report suggested “new investments in sourcing and supply chains, shifts to more stable sectors and developing business strategies that mitigate risks in a more nationalist trading environment.”
CFOs, in particular, should “position balance sheets so your company can move quickly when market conditions become more favorable — or when advantageous buy or sell opportunities arise,” PwC officials recommended.
It also may be time, PwC’s outlook report said, for business leaders to dust off plans for “larger strategic shifts.”
“Coasting on the overall market’s success is no longer an option,” the report stated. “We think many companies will soon be forced to make significant changes to their strategies and accompanying portfolios. M&A is a powerful tool for this strategic repositioning.”
