M&A activity rises in Q4 2025, helped by pre-budget boost
M&A activity rose in October last year, giving the final quarter of 2025 a boost, as deals were rushed over the line ahead of the late Budget– but current tensions in the Middle East will mean more uncertainty for the deals market, says leading audit, tax and consulting firm RSM UK.
Today’s ONS quarterly M&A statistics show the total combined number of cross-border and domestic M&A transactions involving a change in majority share ownership rose to 444 in Q4 2025, from 427 the previous quarter. The value of domestic M&A (UK companies acquiring other UK companies) was £1.8bn in Q4 2025, £5.3bn lower than the previous quarter, and down on Q4 2024 (£6.4bn).
The value of inward M&A (foreign companies acquiring UK companies) was £27.4bn in Q4 2025, jumping £19.8bn on the previous quarter and £23.4bn more than Q4 2024. The total value of outward M&A (UK companies acquiring foreign companies) in Q4 2025 was £1.7bn, £1.7bn lower than Q3 2025, and down £0.1bn on Q4 2024.
Helen Brocklebank, Partner and Head of M&A at RSM UK, said: “The end of 2025 saw business owners rush to complete deals pre-Budget and push ahead with deal processes post-Budget, providing a boost to M&A activity. The Budget gave business owners much-needed clarity, as a result, we’re seeing improved confidence to kickstart sale decisions, rather than delaying them further. If interest rates and inflation continue to come down this year, that should help to drive an uptick in M&A deals.
“That said, businesses are still grappling with uncertainty in the form of a weak labour market and geopolitical instability. Current global geopolitical tensions and the knock-on impact on inflation, and oil and energy prices as critical transportation routes face disruption, plus continued changes around US tariffs and flipflopping on rates will only prolong uncertainty when businesses need stability to plan for the future. For the most part, businesses are doing their best to work through all the noise and disruption.
“In this environment, industries with strong recurring revenues such as business and professional services, healthcare, technology and industrials will continue to be seen as the most attractive acquisition targets. As momentum around artificial intelligence continues to build, tech-enabled businesses or those that have successfully adopted AI will also be sought after.
“While the Spring Statement is expected to be a relatively quiet affair, business owners will welcome any changes that make the UK a more favourable environment to do deals. Founders are already facing impending changes to inheritance tax and capital gains tax, making the need for proactive planning essential.”