Deal activity falls 20% in June quarter: PwC report

After the high of 867 deals in the previous quarter, deal activity fell by 20% to 697 volume-wise and 22% value-wise, from $33.5 billion to $26.2 billion in Q2 2025, according to PwC.

Mergers and acquisitions (M&A) saw a significant decline, dropping to 300 transactions from the previous quarter’s high of 413, marking a 27% decrease, PwC’s ‘Deals at a glance: Q2 CY25’ report shows.

This decline is the largest quarterly drop in the last six quarters, breaking the upward movement that began in Q1 2024. On the other hand, private equity (PE) investments stayed strong, with 397 deals.

Although there was a 13% drop from 454 in Q1 2025, this was 12% higher from the 353 reported in Q2 2024. This continued interest in PE suggests that investor confidence remains strong, despite slight fluctuations from quarter to quarter, the report said. Overall, Q2 2025 shows both reduced M&A and steady PE investment activity.

Considering the M&A activity in particular, domestic deals continued to dominate, making up for 70% of the total M&A deal volumes. However, domestic deals reduced to 213 from the previous quarter’s high of 299, suggesting a brief surge in Q1. Cross-border M&A activity showed mixed trends due to shifts in the global economy. Inbound transactions dropped to 39, the lowest number since early 2024, indicating friction due to economic or geopolitical factors. On the other hand, outbound deals stood at 48, 30% higher than Q2 2024, depicting an interest in international opportunities and a strategic focus on growth. Interestingly, three out of the top five deals are outbound.

M&A and PE markets both experienced changes in deal values quarter-on-quarter. M&A transactions reached $15.2 billion, a drop of 18% from the $18.6 billion in Q1 CY25, but a 17% increase compared to $13.0 billion in Q2 CY24. On the other hand, PE investments faced a notable decline, with deal values falling to $10.9 billion from $14.8 billion in Q1 CY25. This is a 26% decrease from the previous quarter and a slight 6% drop from $11.6 billion in Q2 CY24. On the one hand, M&A activity is displaying relative strength year-over-year (YoY), while on the other, PE appears to be entering a period of stricter investment review or caution regarding risks, the report said.

The retail and consumer sector continues to remain in the lead, featuring 116 deals, though the total deal value remained at $1.4 billion, indicating smaller investments in the sector. On the other hand, the financial services sector with merely 47 deals, holds the highest announced deal value of $4.1 billion due to larger deals.

Following these is technology, showing strong activity at 99 with $1.5 billion. The pharma sector is marginally close in value, with only 30 deals but a high deal value of about $4 billion.

While fewer in number, both the power and chemicals sectors exhibit high deal values at approximately $3.3 billion and $2.5 billion, reflecting concentrated strategic investments. Overall, this data paints a picture where volume and value diverge, revealing varying strategies and levels of investment across sectors.

Healthcare, FinTech and real estate sectors show interesting stories of targeted investments. Healthcare, with 50 deals worth $0.7 billion, shows consistent interest in medical advancements and healthcare solutions, though the deal sizes are moderate. FinTech, even after being considered separate from financial services, stands out with 36 deals totalling $1.3 billion, showing strong investment momentum in digital financial innovations and technologies. The real estate sector, with 29 deals amounting to $1 billion, reflects ongoing confidence in property investments and development projects.

The infrastructure sector is seeing a substantial increase in activity, particularly in renewables, green energy, electric vehicles (EVs) and road development. As India aims to reach 500 GW in clean energy, the sector is witnessing significant M&As.