EY Signals M&A Momentum Is Rebuilding

Deal momentum is gaining traction, but not without complexity. As market confidence cautiously returns, sectors like media, tech, energy, and AI are becoming focal points for big-ticket acquisitions. Evan Berta, an associate at Hunt Scanlon Ventures, explores how recent deal activity is shifting strategy across industries, and what it suggests about the future of M&A in 2025.

The June 2025 edition of EY’s Merger Monthly report presents a cautiously optimistic picture of the U.S. deal environment. According to Mitch Berlin, EY Americas Vice Chair, “M&A in the US bounced back in May, buoyed by easing trade tensions that boosted deal momentum, including several large transactions.” While overall deal volume saw a 6.2% year-over-year decrease, total deal value increased by 39% month-over-month, signaling renewed appetite for large transactions.

The number of deals over $100 million rose by 6.1% compared to April, and transactions over $10 billion spiked by 272% versus the same month in 2024. Though uncertainty remains, EY’s report shows a significant uptick in deal confidence, with activity fueled by policy shifts, artificial intelligence (AI) investment, and targeted portfolio expansion.

“M&A in the US bounced back in May, buoyed by easing trade tensions that boosted deal momentum, including several large transactions.”

AI and Innovation-Focused Dealmaking

One of the report’s central themes is the role of AI in M&A strategy. “Artificial intelligence (AI) is a strategic priority driving growth in investment and innovation,” said Mr. Berlin. He explains that companies are pursuing AI deals for three reasons: to expand AI-driven product offerings, invest in AI infrastructure, and support responsible implementation.

This theme aligns with the broader trend of companies seeking to future-proof operations by embedding digital capability across their portfolios. AI deals represented roughly 14% of deal value for acquisitions exceeding $1 billion. This data highlights how rapidly AI is reshaping not only product roadmaps, but also corporate investment priorities.

Portfolio Diversification Over Consolidation

While many expected deal activity to lean toward consolidation post-COVID, EY’s report highlights a notable shift toward diversification. According to Mr. Berlin, “Companies are increasingly pursuing strategic acquisitions not merely for scale, but to diversify their offerings, enter adjacent markets and accelerate innovation.” This represents a strategic move to build resilience rather than just scale.

Instead of focusing solely on operational efficiencies or competitive eliminations, organizations are prioritizing adaptability. Building “future-ready portfolios” is emerging as the new driver behind M&A activity in uncertain environments.

“Companies are increasingly pursuing strategic acquisitions not merely for scale, but to diversify their offerings, enter adjacent markets and accelerate innovation.”

Sector Spotlight: Media, Tech, Energy

Certain sectors stood out in May. Media & entertainment deals surged 18,030% year-over-year, largely driven by a major content diversification deal. Tech remained a dominant force, with deal value hitting $39 billion, a 22% increase from May 2024. The energy sector, particularly power and utilities, saw a 187% rise in deal value.

EY’s data highlights how M&A has become a channel for digital transformation. In energy, this includes transactions tied to clean tech and infrastructure. In media and tech, deals are being driven by the convergence of content, platforms, and data. These trends show that strategic buyers are increasingly placing long-term bets on how consumers and industries will operate a decade from now.

Valuations Still Pose a Challenge

Despite the pickup in large deals, valuation remains a sticking point. In EY’s most recent CEO Outlook Pulse Survey, 71% of respondents cited valuation mismatches as a primary reason for deal hesitancy. While markets are stabilizing, buyers and sellers continue to diverge on pricing expectations.

Many transactions that moved forward in May did so because buyers were able to rationalize higher pricing based on long-term strategic goals and synergy expectations. However, sectors with more uncertainty, like healthcare and financial services, remain especially prone to deal delays.

Policy as a Catalyst

Another major driver in May’s uptick was policy clarity. The report cites trade agreements between the U.S. and the UK, and de-escalation with China as critical events that boosted deal confidence. Additionally, improved GDP projections and a reduced recession probability (now at 35%) have increased optimism among corporate buyers.

Mr. Berlin points out that these developments helped remove some of the macroeconomic fog that had been clouding strategic decisions in the boardroom. The inference is clear: when government signals are stable, deal pipelines begin to move.

Related: The Waiting Game: Dealmakers Quietly Positioning For A Rebound

Looking Ahead

While risks remain, from inflation to geopolitical tensions, EY’s June outlook concludes on a positive note: “The outlook for US M&A remains one of optimism and resilience despite a fair amount of risk.” The rebound in May may not signal a full recovery yet, but it suggests the deal environment is turning a corner.

If this trend continues into Q3, firms with well-defined acquisition strategies, disciplined integration playbooks, and sector-specific insight will have a clear edge. For now, M&A leaders appear to be moving from defense to offense, and the momentum is building.

“The outlook for US M&A remains one of optimism and resilience despite a fair amount of risk.”