BLOG — Feb 7, 2025
Dealmakers enter 2025 believing tailwinds are blowing
By Joe Mantone, Nick Lazzaro, and Darragh Riordan
Key Findings
- The total announced value of M&A transactions and the number of deals increased year over year in 2024, ending a two-year decline for both.
- The total value of fourth-quarter 2024 global equity issuance transactions jumped 55.6% quarter over quarter to $116.35 billion, the highest quarterly total since 2021.
- The total value raised in global equity issuance from 2022 through 2024 was $1.039 trillion, just below the $1.043 trillion raised in 2021 alone.
The M&A and initial public offering activity in the 2024 fourth quarter does not reflect the optimism about dealmaking in early 2025.
During the final three months of 2024, the total value of global M&A fell quarter over quarter, and IPO activity remained largely muted in most parts of the world. However, the discourse around the outlook for deals brightened after the US elections.
Republicans now having control of Congress, and the White House boosted confidence about the economic backdrop. The hope now is that the government will provide a conducive operating environment by pulling back on regulation and taking a more business-friendly approach to tax policy. US activity can serve as a catalyst for transactions around the globe because it often provides the largest dealmaking market.
However, the US was not the largest IPO market in the fourth quarter of 2024. That distinction belonged to India, which recorded the highest IPO totals in terms of deals and amount raised in the fourth quarter.
India's IPO activity was an outlier as the global fourth-quarter 2024 totals remained far below 2021 levels. IPOs remained muted despite stock prices on the rise, and volatility was mostly subdued as the VIX — the Chicago Board Options Exchange S&P 500 volatility index — only topped 25 on two days and never reached 30 during the 2024 fourth quarter.
The IPO market was still dealing with a setback that stemmed from the market volatility spike in August 2024 when the VIX reached 65.7, the highest point since the pandemic’s height in March 2020. The calendar also presented some challenges for IPO activity.
IPOs tend to slow around the year-end holidays, and before that many hit the pause button on going public ahead of the US elections. The announcement of large M&A deals also slowed ahead of the elections as October 2024 recorded the second-lowest total monthly M&A value in the US and globally.
The bigger deals picked up over the final two months, and while it was not enough to top the 2024 third-quarter global total, the activity did help 2024's full-year value surpass 2023's full-year value. This marked the first time since 2021 that the total value of global M&A increased year over year.