Editor's Note: Adam Reilly is the National Managing Partner for M&A and Restructuring Services at Deloitte (one of the Big Four accounting firms). The views expressed in this article are solely those of the author.

In early Q2 2025, the United States implemented or proposed new tariffs on a range of imported goods, particularly targeting China and other specific countries, as part of ongoing trade policy adjustments.

Amid these unpredictable trade policy changes, potential geopolitical pressures, and evolving regulatory adjustments, the M&A market is expected to remain volatile and complex in the near term. These dynamics open up real and new possibilities for strategic value creation and growth.

Although the M&A market's start in 2025 may not have been as rapid as dealmakers expected, by mid-year we see activity stabilizing, with deal value up 12% year-over-year, while overall U.S. deal volume is up 2% year-over-year. Additionally, global private equity holds approximately $3.8 trillion in dry powder available to seek acquisition targets worldwide.

However, due to a lack of predictability, some dealmakers have chosen to wait on the sidelines, and in some cases, have paused deal activity entirely. On the other hand, we see leading dealmakers in the market increasingly shifting from reactive to proactive.

In practice, this involves adopting strategies to prepare for and capitalize on volatility—completing favorable deals while competitors remain on the sidelines. While it is understandable that many dealmakers are pausing M&A and trying to predict the next move in trade policy, these instincts should be resisted where possible. Instead, the opportunity lies in pivoting or behaving differently during these uniquely volatile periods. The results of Deloitte's 2025 M&A Trends Survey show that there are at least three ways to do this.

Seeking growth across new borders

Depending on how long and how deep the tariffs may be, this could prompt companies to diversify their operations or expand into new markets to reduce reliance on tariff-affected regions.

Deloitte's 2025 M&A Trends Survey found that at least 85% of corporate and private equity leaders ranked cross-border deals as one of their top priorities this year. The main reasons respondents cited for increased interest in overseas markets include market expansion and access to technology.

Furthermore, when asked which foreign markets are the primary focus for deal targets, U.S. dealmakers indicated they are increasingly inclined toward closer deals in more developed and stable markets—such as Canada, Mexico, or Europe—to shorten supply chains and achieve production reshoring.

This diversification strategy may involve acquiring companies in countries with more favorable trade terms, or establishing partnerships to navigate the complex trade environment.

Exploring non-traditional financing

With interest rates higher and lasting longer than expected, many buyers have been unable to finance acquisitions through bank loans and bond markets. Instead, private equity buyout funds are under pressure to exit investments and are seeking ways to put capital to work. The result: growing interest in using the private credit market to finance deals.

While this is not a new approach, financial leaders' interest in shifting from traditional debt to other innovative methods is steadily growing. When asked, 52% of private equity executives revealed that they have used non-bank lenders to finance deals in the past year, or plan to do so this year—up 5% from 2024. This form of lending is likely here to stay, as the flexibility and speed of private credit hold lasting appeal.

Embedding technology into the deal process

Financial leaders have made tangible progress in consolidating digital transformation efforts. According to Deloitte's 2025 M&A Trends Survey, nearly all corporate and private equity executives reported that all stages of the M&A lifecycle are now "fully" or "almost fully" digitized. Areas such as target identification, target screening, and integration have seen significant improvements in digitizing the deal process.

Given the complexity of M&A deals, this is not surprising. We also see leaders taking action around GenAI in three specific areas: first, how the technology is used during the deal process; second, which deals to pursue when acquiring AI and GenAI capabilities and assets, as well as divesting business models vulnerable to AI disruption; and third, how potential synergies in post-deal cost structures can be achieved through GenAI.

Don't fear volatility, seek value

Deloitte surveyed 1,500 U.S. corporate and private equity professionals at the end of 2024 to assess their expectations for M&A activity over the next 12 months and to understand their recent deal experience. This research revealed how leading M&A teams are developing new strategies to capture value amid current risks and uncertainty, rather than standing on the sidelines.

In fact, value realization is the biggest opportunity in the current environment. Today, risks and challenges may offer more attractive opportunities for acquirers with cash and other financing options to "buy the dip." Corporates and private equity funds should remain agile and watch for a narrowing of the bid-ask spread—an indication that value is better than in recent years.

What's the bottom line? M&A volatility has intensified over the past few years, and this trend continues. But for dealmakers looking to accelerate deals and capture value in the current climate, opportunities are increasing, so adopting a flexible and agile approach will be crucial.