Key points:

  • Early optimism about an increase in deal volume faded fast as Q1 progressed and uncertainty rocked the markets;
  • Predictions now are that deal volume will be flat in 2025, with incremental growth at best;
  • Companies “lack confidence in pursing transactions without predictability” especially when it comes to trade policy and antitrust regimes;
  • “Uncertain times mean clients need to be clear with their key stakeholders what they are certain about.”
  • IPO activity has slowed also, with some companies putting plans on hold, but “that doesn't mean they should also freeze their communications efforts.”

NEW YORK and LONDON—Political uncertainty has slammed the brakes on what many observers expected to be a surge in corporate mergers and acquisitions in the first quarter of 2025, financial public relations experts say.

In Davos, as President Trump was sworn in, the mood was unquestionably bullish, with both agency leaders and corporate communications executives expecting an upturn in M&A activity after deal value increased only modestly (by about 12%) in 2024, a year when the US economy was booming but much of the world appeared to be lagging.

The mood was captured in a February analysis issued by McKinsey: “Although a thicket of opposing forces is sure to play out in the global M&A landscape, complicating dealmaker decisions, a variety of compelling factors make it reasonable to construct an optimistic—perhaps even bullish—case for 2025.

In particular, the consulting company said, “macroeconomic conditions are more favorable than in previous years. On a global basis, economies have proved durable. The much-feared global recession didn’t materialize.”

Unfortunately, the “thicket of opposing forces” proved denser and more troubling than most observers expected. First the Trump tariffs sent shockwaves through the global markets and then the US economy contracted by 0.3%—reversing  three years of steady but consistent growth.

By the middle of April. The mood reported by consulting firm EY had shifted: “We predict corporate M&A deal volumes will be flat in 2025… Taking into account the weak GDP growth in Q1 and the economic impact of tariffs, we have lowered our US real GDP growth projections to 1.1% for both 2025 and 2026.”

In the absence of the mergermarket ranking of public relations firms, which we usually defer to when covering this space, we are dependent on the PR agency rankings published by The Deal, which show Joele Frank Wilkinson Brimmer Katcher as the most active firm in the US M&A space during the first quarter, having worked on a total of 30 deals.

FGS Global was in second place (17 deals) and Kekst CNC in third (14) ahead of H/advisors and ICR,

For comparison purposes, the top firm in mergermarket’s 2024 ranking worked on more than 350 deals in the US. So it’s little surprise that financial communications specialists in the US and globally report that the M&A business has failed to live up to their earlier expectations.

Says Jeremy Fielding, co-CEO of Kekst CNC in New York, “Uncertainty in the wider global environment has chilled M&A so far in 2025, with management teams and boards lacking confidence in pursing transactions without predictability and visibility into the economy, the impact of tariffs and trade policy, and antitrust regimes in key jurisdictions.”

And in Europe, SEC Newgate chief executive Emma Kane says, ““Q1 saw M&A activity fall short of expectations, hampered by economic headwinds, valuation gaps, and ongoing uncertainty. The scarcity of deals is further emphasised by the complete lack of transactions in the UK, which is the largest market on the continent.”

The exception, she says, was that both key French players—Publicis and Havas—have been active handling c.40% of the known deals signed in the first quarter globally;

One challenge, says Kane, is that “whilst sellers’ expectations remain high, buyers are cautious against economic and geopolitical uncertainty, especially around tariffs and trade which have made it harder for buyers and sellers to predict future business performance and agree on valuations.”

Still, she remains moderately optimistic for the future: “For the rest of 2025, a backlog of prepared deals may come to the market, particularly as PE firms seek exits and strategic buyers look to scale or future-proof their offering.”

As for the deals that are being undertaken, “uncertain times mean clients need to be clear with their key stakeholders what they are certain about—the strategic rationale, the value creation opportunity, the path to close—and the best way to do that is through a thoughtful and targeted communications plan leading up to announcement day and beyond,” says Matt Sherman, president and partner at Joele Frank.

And Fielding adds; “For transactions that are being undertaken, we are working closely with corporate leadership to ensure that strategic communications – including nuanced messaging and careful scenario planning – creates the conditions with capital markets and key stakeholders for a successful route to closing.”

The uncertainty is also being felt in the IPO arena, as PwC reported in April: “The US IPO market started 2025 with a mix of optimism and caution. While the first few weeks of the year saw a solid pace of IPO activity, various factors such as persistent inflation concerns, evolving AI market dynamics and shifting government policies have created an environment of heightened uncertainty.

“This has led many companies in the IPO pipeline to consider waiting for more stable market conditions.”

According to Kristen Leathers, executive vice president at V2 Communications, “To say the market is uncertain is an understatement. In the past weeks, we've seen stocks sink and surge in response to wavering tariff threats. This market volatility has left many companies reconsidering the optimal path – and timing – for achieving their business objectives, whether those involve an acquisition or IPO.:

But she offers this advice: “While many companies are opting to put their exit strategies on ice until market conditions stabilize, that doesn't mean they should also freeze their communications efforts. In fact, during periods of uncertainty, strategic communication is more important than ever.

“Amid an unpredictable market environment, brands must reassure stakeholders that they remain steadfast in their mission and business objectives, and are continuing to make measurable progress toward their goals. They should be forthcoming about how they’re adjusting their strategies to address new and evolving market dynamics—whether those be related to their product offerings, operating models or go-forward investment plans.”

In Europe, Kane says, IPO activity is “recovering, but the UK is still muted with most issuers targeting post-Q1 launches. I expect to see more exits from PE firms via IPOs later in 2025, particularly for large-cap assets.”